US bank fined $37.5 million for illegally using customer data

  • US Bank has been fined for using customer data to open fictitious accounts and new lines of credit without permission.
  • Employees were forced to access customer credit reports and open new accounts to inflate sales figures.
  • The bank is required to pay $37.5 million and reimburse all illegal fees and charges – with interest.

After more than a decade of illegally accessing customer credit reports to open fraudulent lines of credit and create fictitious accounts to inflate sales figures, US Bank is fined $37.5 million for its illegal business practices.

The Consumer Financial Protections Bureau, following a five-year investigation, found that US Bancorp, the fifth-largest commercial bank in the United States, was pressuring employees to meet sales targets by creating fraudulent checking and savings accounts, credit cards and lines of credit without customer authorization.

“For more than a decade, US Bank has known that its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts,” CFPB Director Rohit Chopra said in a statement. “We all need to do more to hold companies that break the law accountable when they misuse and misuse our sensitive personal data.”

The CFPB investigation found evidence that US bank officials were aware of the pressure on employees to create fake accounts and not only did not intervene, but organized incentive compensation programs that financially rewarded employees. employees for the sale of banking products and the opening of new accounts.

In addition to the $37.5 million fine, the Minneapolis-based U.S. bank will be required to reimburse all illegally levied fees and charges related to the fraudulent accounts and pay interest to affected consumers.

In a statement provided to Insider, a spokesperson for the U.S. bank said the settlement was related to “legacy sales practices involving a small percentage of accounts” dating back to 2010. In response to the illegal sales practices, they have said the bank had a process and oversight in place. improvements since 2016 to address concerns.

“CFPB’s action concludes a more than 5-year investigation,” the US bank’s spokesperson told Insider. “We are happy to put this matter behind us.”

The US Bank fine is not the first time a major bank has been found illegally setting up accounts for unsuspecting customers without their permission. In 2016, Wells Fargo settled $185 million with regulators after it discovered 2 million fake accounts illegally created by employees to increase their cross-sell ratio.

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