US Bank fined for opening ‘sham’ accounts for customers

US Bank, which is headquartered in Minneapolis and has more than $559 billion in assets, pressured its employees to meet sales targets as part of their job requirements, and offered them incentives to sell banking products, the regulator said. To achieve those goals, the bank’s employees illegally accessed customer credit reports and personal information to open accounts without authorization, the investigation found.

The CFBP announced Thursday that it has fined the US Bank of $37.5 million after a five-year investigation.

“For more than a decade, US Bank knew its employees were abusing its customers by misusing consumer data to create fictitious accounts,” said CFPB executive director Rohit Chopra in a press release.

In a statement to CNN Business, US Bank said it has “made process and oversight improvements” since 2016 regarding concerns about sales practices. Employees now receive incentives only for accounts where the customer uses the service.

The settlement is “related to long-standing sales practices where a small percentage of accounts date back to 2010,” the US Bank said in a statement Saturday. “We are happy to put this case behind us.”

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

The CFBP said its investigation found evidence that the bank was aware that its employees opened accounts without the consent of the customers, and took no measures to prevent and detect them. The bank’s sales campaigns and compensation programs rewarded employees for selling banking products, the agency added:

Regulators found that the employees opened deposit accounts, credit cards and lines of credit that high interest rates and expensive fees passed on to the customer.

“The US Bank’s behavior harmed its customers in the form of unwanted accounts, negative effects on their credit profile and loss of control over personally identifiable information,” the CFBP said in its press release, stating that customers were being forced to use the non-identifiable information. authorized accounts in their names and request a refund themselves.

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