(New York) For more than a decade, US Bank pressured its employees to open fake accounts on behalf of their customers to meet unrealistic sales targets, the Privacy Office said Thursday. Consumers (CFPB), in a case deeply similar to the Wells Fargo short-selling practices scandal of the past decade.
Posted at 1:48 p.m.
The CFPB alleged that US Bank accessed consumer credit reports to open checking and savings accounts, credit cards and lines of credit without their permission. Employees were encouraged to do so, in order to achieve the bank’s goals of selling multiple products to each bank customer.
The extent of the fake US bank accounts scandal was not immediately revealed by the CFPB, but the bank was forced to pay 37.5 million in fines and penalties and will have to reimburse customers for the charges they have paid for the fake accounts.
“For more than a decade, US Bank has known that its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts,” CFPB Director Rohit Chopra said in a statement.
A US Bank spokesperson said poor sales practices were a problem that dated back to 2016 and the bank had made significant improvements to its sales practices since then. The Consent Order reached with the CFPB acknowledges that US Bank has made improvements to its sales practices in recent years, including no longer tying compensation to accounts opened and requiring customer consent to open new services.
“The action of the CFPB closes an investigation (of more than five years). We are happy to put this matter behind us,” said Lee Henderson, spokesperson for the bank.
The Wells Fargo sales practices scandal rocked the financial world five years ago when it was discovered that the bank had encouraged its employees to open millions of fake accounts to meet their sales targets. The scandal ruined Wells Fargo’s reputation as a well-run bank during the Great Recession, resulted in billions of dollars in fines against the bank, and almost immediately led to the resignation of the bank’s CEO and eventually its board. administration.
Wells has been under close watch from the Federal Reserve since that scandal broke, preventing the bank from growing until it fixes its work culture. There is no indication that the Fed plans to release Wells from his regulatory leash anytime soon.
Minneapolis-based US Bank is currently in the process of buying the retail banking business of Japanese banking giant MUFG, a deal announced more than a year ago. The deal is taking longer than expected, with the two banks now expecting it to close in the second half of the year.