CFPB Hits US Bank with $37.5M Fine
CFPB Hits US Bank with $37.5M FineFor over a decade, US Bank has been pressuring employees to open fake accounts for customers in order to meet unrealistic sales goals.
On Thursday, the Consumer Financial Protection Bureau (CFPB) took action against the bank for illegally accessing its customers’ credit reports and opening checking and savings accounts, credit cards, and lines of credit without customers’ permission.
CFPB said in its statement that U.S. Bank must make harmed customers whole and pay a $37.5 million penalty.
The CFPB’s investigation found specific evidence that revealed that U.S. Bank was aware that sales pressure was leading employees to open accounts without authorization, and the bank had inadequate procedures to prevent and detect these accounts. Specifically, U.S. Bank imposed sales goals on bank employees as part of their job requirements. U.S. Bank also implemented sales campaigns and an incentive-compensation program that financially rewarded employees for selling bank products.
CFPB says this conduct harmed consumers in the form of unwanted accounts, negative effects on their credit profiles, and the loss of control over personally identifiable information. Customers also had to waste time and energy closing unauthorized accounts and resolving consequences stemming from them, including seeking refunds for improperly charged fees.
The CFPB found that U.S. Bank violated the Consumer Financial Protection Act, the Fair Credit Reporting Act, the Truth in Lending Act, and the Truth in Savings Act.
The CFPB’s order requires U.S. Bank to pay a $37.5 million penalty which will be deposited into the CFPB’s victims relief fund. This fund provides compensation to consumers harmed by violations of federal consumer financial protection law.
U.S. Bank must also forfeit and return all unlawfully charged fees and costs to harmed customers.
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Add a couple of zeros to the penalty and maybe a decade in a medium security prison for at least a half dozen executives and you might just dissuade other companies from doing the same.
If it has to fake sales numbers, what’s that tell you? Just stay clear.
That’s not nearly a big enough fine and charges ought to be brought against whoever was in charge of overseeing that stuff. I have a Wells Fargo card that is so old now that I keep it for age of accounts but it was one of theirs that they opened without my knowledge. I just never asked why I got it (11 years ago)