A bank settled CFPB charges for enrolling customers in an overdraft-protection service using improper sales practices. According to the CFPB, the bank's failures included "failing to obtain consumers' affirmative consent" to enroll in the service and the subsequent charging of overdraft fees.
In a CFPB Consent Order, the Bureau stated that the institution did not present new customers with written disclosures concerning the service prior to enrollment, in violation of CFPB Rule 1005.17 ("Requirements for overdraft services"), and that the description of the overdraft program provided by the bank's employees was inaccurate, in violation of prohibited acts under Section 1036(a)(1)(B) of the Consumer Financial Protection Act.
To settle the charges, the financial institution agreed to (i) pay $97 million in restitution to affected customers, (ii) a civil money penalty of $25 million, and (iii) submit compliance reports as outlined in the Consent Order.
Primary Sources
- CFPB Press Release: Consumer Financial Protection Bureau Announces Settlement with TD Bank for Illegal Overdraft Practices
- CFPB Consent Order: TD Bank, N.A.
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