April 13, 2024

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US bank fined for opening ‘pseudo’ customer accounts

US bank fined for opening 'pseudo' customer accounts

The regulator said US Bank, which is based in Minneapolis and has assets of more than $559 billion, has pressured its employees to meet sales targets as part of their job requirements, offering them incentives to sell banking products. The investigation found that in order to achieve these goals, bank employees illegally accessed customers’ credit reports and personal data to open accounts without permission.

CFBP announced Thursday that it has fined the US bank $37.5 million, after a five-year investigation.

“For more than a decade, the US bank has known that its employees are exploiting its customers by misappropriating consumer data to create fake accounts,” CFPB Director Rohit Chopra said in a press release.

In a statement to CNN Business, the US bank said it had “made improvements to operations and oversight” since 2016 regarding sales practice concerns. Employees now receive incentives only for accounts where the customer uses the service.

The US bank said in a statement on Saturday that the settlement “is related to legacy selling practices involving a small percentage of accounts dating back to 2010.” “We are pleased to put this matter behind us.”

US Bank has more than 2,800 branches across the United States.

CFBP said its investigation found evidence that the bank was aware That its employees were opening accounts without customers’ permission, and had no measures in place to prevent and disclose it. The agency added that the bank’s sales campaigns and bonus programs reward employees for selling their banking products

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The organizers found that Employees opened deposit accounts, credit cards, and lines of credit were transferred High interest rates and exorbitant fees passed on to the customer.

“The US bank’s behavior has harmed its customers in the form of unwanted accounts, negative impacts on their credit files, and loss of control over personally identifiable information,” CFBP said in its statement, saying that customers were forced to close unauthorized accounts in their accounts. Names and seek to recover the money themselves.