US Bank fined for opening “sham” accounts for customers
US Bank, which is based in Minneapolis and has more than $559 billion in assets, pushed its employees to meet sales targets as part of their job requirements and gave them incentives to sell bank products, the regulator said. To achieve these goals, bank employees illegally accessed customer credit reports and personal data to open accounts without permission, the investigation found.
The CFBP announced Thursday that it fined US Bank $37.5 million, following a five-year investigation.
“For over a decade, US Bank knew that its employees were exploiting their customers by misusing consumer data to create fictitious accounts,” CFPB Director Rohit Chopra said in a press release.
In a statement to CNN Business, US Bank said it has “made process and supervisory improvements”[ads1]; 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 legacy sales practices involving a small percentage of accounts dating back to 2010,” US Bank said in a statement Saturday. “We are happy to put this matter behind us.”
US Bank has over 2,800 branches across the United States.
The CFBP said the investigation found evidence the bank was aware of it that its employees opened accounts without customers’ authorization and had no measures to prevent and detect them. The bank’s sales promotions and compensation programs rewarded employees for selling bank products, the agency added
Regulators found that employees opened deposit accounts, credit cards and lines of credit as bar high interest rates and expensive fees that were passed on to the customer.
“US Bank’s conduct harmed customers in terms of unwanted accounts, negative effects on their credit profiles and loss of control over personally identifiable information,” CFBP said in its release, saying customers were forced to close the unauthorized accounts in their. name and seek reimbursement yourself.
