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US Bank fined $37.5 million for taking advantage of customers by illegally opening accounts
July 29, 2022
For over a decade, U.S. Bank employees illegally accessed customers' credit reports and personal data to open sham accounts. As a result, the bank has been fined $37.5 million by the Consumer Financial Protection Bureau. The funds will be placed in a victim relief fund.
U.S. Bank, the fifth largest bank in America, manages 2,800 branches and has $559 billion in assets.
The Minneapolis-based bank offered an incentive-compensation program and pressured its workers to meet demanding sales goals. Employees resorted to accessing customers' sensitive information to open checking and savings accounts, credit cards, and additional lines of credit without consent.
During its five-year investigation, the CFPB discovered that U.S. Bank was aware its employees were utilizing illegal methods to increase sales. Nevertheless, the bank continued to run sales campaigns and offer workers financial incentives.
On Thursday, CFPB Director Rohit Chopra announced, "For over a decade, U.S. Bank knew its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts. We all must do more to hold lawbreaking companies accountable when they abuse and misuse our sensitive personal data."
The CFPB found U.S. Bank violated several consumer protection acts by exploiting personal data, opening accounts without permission, and failing to provide required disclosures.
Victims of the fraud lost control of their sensitive data and suffered negative impacts on their credit ratings. Affected customers were forced to go out of their way to close the accounts and pursue refunds.
In addition to the $37.5 million relief fund, all charges incurred on illegally opened accounts were ordered to be paid back to the customers with interest.
A U.S. Bank spokesperson told CBS MoneyWatch that the fraudulent practices ended in 2010 and impacted only a small fraction of customer accounts. "Since 2016, the bank has made process and oversight improvements that have been effective in addressing these sales practices and concerns," the spokesperson stated.
Two years ago, Wells Fargo was caught committing a similar crime. After opening millions of illegal accounts from 2002 to 2016, the bank was fined $3 billion.
It's still unclear how many accounts were fraudulently opened by U.S. Bank.
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Candace Hathaway is a staff writer for Blaze News.
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