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U.S. Bank opened fake accounts for unsuspecting customers

One of the largest banks in the U.S. illegally opened accounts for customers without their permission, according to the Consumer Financial Protection Bureau (CFPB).

Minneapolis-based U.S. Bank, with over $559 billion in assets, accessed unsuspecting customers’ credit reports, opened checking and savings accounts, credit cards and lines of credit without customers’ authorization in order to increase sales, the CFPB found in a five-year-long investigation.

U.S. Bank knew its employees were opening the unauthorized accounts, but failed to regulate them, according to the CFPB. The bank imposed sales goals on workers and introduced an incentive-compensation program that financially rewarded employees for selling its products like deposit accounts and credit cards, the CFPB said.

“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 Thursday. “We all must do more to hold lawbreaking companies accountable when they abuse and misuse our sensitive personal data.”

The illegal actions harmed the bank’s customers by hurting their credit scores, for one. Customers were also responsible for closing the unauthorized accounts and seeking refunds on fees they were charged. 

A spokesperson for U.S. Bank told CBS MoneyWatch that the creation of faux accounts dated back to 2010. 

“Today’s settlement related to legacy sales practices involving a small percentage of accounts dating back to 2010,” the spokesperson said. “Since 2016, the bank has made process and oversight improvements that have been effective in addressing these sales practices and concerns.” 

The CFBP is fining U.S. Bank $37.5 million, which will be paid out to consumers who have been harmed by violations of federal consumer financial protection law.

U.S. bank is also responsible for returning all unlawfully charged fees to its customers, with interest. 

Wells Fargo engaged in a similar illegal scheme in which bank employees engaged in fraud and identify theft, and opened unauthorized accounts for existing clients. Wells Fargo was fined $3 billion, including a $500 million civil penalty to be distributed to investors by the SEC.

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