US Bancorp, the fifth largest commercial bank in the United States has been fined $37.5 million plus interest for unlawful business practices. The bank walked the illegal roads for more than a decade, using customer data for the creation of sham accounts, and opening fraudulent credit lines. The dark side of the supposedly prestigious bank came to light following a five-year investigation conducted by the Consumer Financial Protection Bureau.
The What And How
The investigation conducted by the Consumer Financial Protection Bureau revealed that the US Bancorp pressured the employees to create fraudulent checking and savings accounts in order to meet sales goals, in addition to creating lines of credit without seeking the permission of the customer. According to Rohit Chopra, the CFPB director,”For over a decade, U.S Bank knew its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts. We all must do more to hold lawbreaking companies accountable when they abuse and misuse our sensitive personal data.”
As per the evidence collected during the course of the investigation, it was revealed that the Bank did nothing to stop the illegal practices and the misuse of data although it was completely aware of the pressure on the employers who resorted to the creation of fake accounts. As if that was not enough, it also conducted incentive-compensation programs that kept the employees motivated by rewarding them financially.
The bank has finally been proven guilty and will now have to reap the rewards of its actions. In addition to the whopping fine worth $37 million, the bank will also have to refund any fees collected illegally and interest. According to the statement given to Business Insider by a US Bank spokesperson, the settlement was associated with “legacy sales practices involving a small percentage of accounts.” This dates back to the year 2010.
This is not the first time a major bank has been proven guilty of illegal business practices. Wells Fargo came under the radar in 2016 after it was found out that the employees created over 2 million fake accounts in order to enhance their cross-sell ratio.
