RSSThe Consumer Financial Protection Bureau fined U.S. Bank $37.5 million for knowingly allowing employees to illegally access customer credit reports and for opening checking, savings and credit accounts without permission for more than a decade.
According to the CFPB, the $559 billion U.S. Bank was responsible for the illicit activity by imposing sales goals as part of their employees’ job requirements. “In response, U.S. Bank employees unlawfully accessed customers’ credit reports and sensitive personal data to apply for and open unauthorized accounts,” the CFPB stated.
The CFPB ordered U.S. Bank, the fifth-largest bank in the United States, to return unlawful fees and costs to harmed customers, plus interest. The order did not list the number of impacted customers.
U.S. Bank did not admit or deny wrongdoing. In a statement U.S. Bancorp provided to Reuters, the bank said the tactics the settlement refers to have since been discontinued and that such sales practices only involved “a small percentage” of accounts from 2010 on. According to the bank, it has upgraded its oversight and practices.
Other banks have been fined for similar violations over the last several years. In 2020, Wells Fargo reached a $3 billion settlement with the Justice Department and the SEC over a fake accounts scandal. It previously paid out $190 million in 2016 over its fake account scandals to the CFPB, the Office of the Comptroller of the Currency and the City and County of Los Angeles.
The CFPB filed a lawsuit against Ohio-based Fifth Third Bank in 2020 over allegations it opened accounts without customers’ knowledge or consent. The lawsuit has since evolved into a heated court battle.
Similar to U.S. Bank, both Wells Fargo and Fifth Third reportedly offered employees an incentive-compensation program to reward selling new products.
