US bank fined $37.5 million for illegally using customer data

  • US Bank was fined for using customer data to open fake accounts and new lines of credit without permission.
  • Employees were pressured to access customer credit reports and open new accounts to inflate sales figures.
  • The bank is required to pay $37.5 million and return any illegal fees and charges – with interest.

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

The Consumer Financial Protections Bureau, after a five-year investigation, found that US Bancorp, the fifth-largest commercial bank in the United States, pressured employees to meet sales targets by creating fraudulent checking and savings accounts, credit cards, and credit card without customers’ permission.

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

The CFPB investigation found evidence that Bank of USA employees were aware of the pressure faced by employees to create fake accounts and not only did not intervene, but carried out compensation incentive programs that financially rewarded employees for selling banking products and opening of new accounts.

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

In a statement provided to Insider, a Bank of USA spokesperson said the settlement was related to “legacy sales practices involving a small percentage of accounts” since 2010. In response to the illegal sales practices, they said the bank made process and oversight improvements since 2016 to address concerns.

“The CFPB action ends a more than 5-year investigation,” the US Bank spokesperson told Insider. “We are pleased to put this matter behind us.”

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

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