Author: Everleigh Connely
Every bit of data is valuable, no matter what it is. That’s why there are strict regulations for data privacy. While they exist, some companies do not feel fear and are non-compliant. Nonetheless, they are bound to be revealed and face the consequences.
This is exactly what happened to the U.S. Bank, which is now facing a $37.5 million fine with interest.
After almost a decade of taking advantage of its customer’s data, the U.S Bank finally met the consequences of its unlawful business practices. Keep reading to know more about the illegal and scandalous practices of the U.S Bank below.
U.S Bank’s Illegal Access to Customer Data
Being a bank, it is only automatic that the U.S. Bank has its customers’ data, Just like the other banks.
However, it ought to protect the crucial data and not take advantage of it. For that reason, the major bank really did have illegal business practices. In particular, it unlawfully accessed the customer’s data, specifically the credit reports, and opened fraudulent lines of credit.
After successfully opening fraudulent lines of credit, the bank used them to create sham accounts with the primary goal of inflating its sales numbers.
This illegal practice lasted over a decade and it took the Consumer Financial Protection Bureau (CFPB) took five years of investigation to unveil the bank’s illegal practice.
The Consumer Financial Protection Bureau’s five-year investigation uncovered that the U.S Bank had pressured its employees to do illegal business practices just to meet the sales goals. The employees were forced to take advantage of the data without customers’ permission and created fraudulent lines of credit, checking and savings accounts, and credit cards.
Of course, the U.S. Bank’s abuse of its power and jurisdiction came to an end, and resulted in consequences.
The Consumer Financial Protection Bureau penalizes the U.S. Bank with a $37.5 million fine. At the same time, CFPB also ordered the bank to return all the illegal fees it took from its customers and add interest to the amount.
Since the scandalous and illegal business practices of the U.S Bank created a huge buzz and became headlines, its spokesperson stated that the settlement was just related to “legacy sales practices involving a small percentage of accounts”, which was dated back in 2010.
As for the issue of illegal sales practices, the spokesperson responded that the bank has already made progress in addressing and has made improvements following the concerns.
In the end, the spokesperson shared that they were pleased that the CFPB’s five-year investigation was already over. Thus, the U.S Bank is already putting the matter behind.
While the CFPB’s five-year investigation and the fine that the U.S. Bank has is scandalous and alarming, its spokesperson manages to provide a statement of consolation and assurance. The words might seem trustworthy, but unfortunately not. After all, it is not the first time a major bank was engaged in illegal business practices.
In 2016, Wells Fargo also had to pay a settlement fee of $185 million when it was found that it created 2 million fake accounts in an effort to increase its cross-sell ratio. Of course, it is always unfortunate and displeasing to hear such news.