U.S. Bank pressured employees to open fake accounts in customers’ names to meet unreasonable sales goals, the Consumer Financial Protection Bureau said Thursday.
In a policy that went on for at least a decade, employees were encouraged to open savings accounts, checking accounts and credit cards without customer permission in an attempt to sell multiple products to each customer.
U.S. Bank spokesperson Lee Henderson said the problem has been fixed.
“Since 2016, the Bank has made process and oversight improvements that have been effective in addressing these sales practices concerns. The action by the CFPB closes out a more than five-year investigation. We are pleased to put this matter behind us,” Mr. Henderson said in a statement.
According to the CFPB, U.S. Bank must refund customers for any charges made without their permission, and pay $37.5 million in fines.
The consent decree reached between U.S. Bank and the CFPB states that the company made improvements to its sales policies recently including requiring consent from customers when opening new accounts and no longer tying pay to the creation of new accounts.
“For over a decade, U.S. Bank knew its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts,” CFPB Director Rohit Chopra said in a statement.
The new case is eerily similar to the Wells Fargo account fraud scandal from 2016, where employees set up millions of fake accounts for years leading to customers getting charged for credit cards or accounts they never opened.
The investigation by the CFPB led to Wells Fargo paying billions in fines and losing the public trust it gained during the 2008 financial crisis. The CFPB has kept the company on a tight leash ever since.
It remains to be seen if U.S. Bank will suffer similar treatment, but the bank’s plan to acquire the retail business of Japanese bank MUFG might be in jeopardy in the wake of Thursday’s announcement.
The deal is expected to close later this year.
• Vaughn Cockayne can be reached at vcockayne@washingtontimes.com.
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