The Consumer Financial Protection Bureau (CFPB) has ordered TD Bank to pay $28m in penalties for sharing inaccurate and negative consumer reports.
The bank was ordered to pay $7.76m to a few thousand consumers affected by the company’s behaviour and to pay $20m to the CFPB’s victim relief fund.
CFPB said the bank violated consumer financial protection laws, including the Fair Credit Reporting Act and its regulation, and engaged in unfair, deceptive, or abusive acts or practices.
According to the financial watchdog, TD Bank has repeatedly shared inaccurate, negative information about its customers with consumer reporting companies.
It is the CFPB’s second action against TD Bank, after ordering an estimated $97m in restitution to about 1.42 million consumers and a $25m penalty for illegal overdraft practices, in 2020.
CFPB director Rohit Chopra said: “The CFPB’s investigation found that TD Bank illegally threatened the consumer reports of its customers with fraudulent information and then barely lifted a finger to fix it.
“Rather than treating its customers fairly and following the law, TD Bank’s management clearly cared more about growth and expanding its empire through mergers. Regulators will need to focus major attention on TD Bank to change its course.”
In its investigation, CFPB found that TD Bank repeatedly provided inaccurate account information to consumer reporting companies for several years.
The information contained systemic errors about personal bankruptcies and credit card delinquencies, and information that it knew or suspected was fraudulent.
TD Bank failed to resolve disputes raised by customers or consumer reporting companies, and sometimes it failed to conduct any investigation.
The bank’s actions violated both the Fair Credit Reporting Act and the Consumer Financial Protection Act and affected hundreds of thousands of its customers.
TD Bank failed to fix credit card reporting errors, shared incorrect information with consumer reporting companies, and failed to investigate and resolve consumer disputes, said CFPB.
