U.S. Bank Fined $37.5 Million in Sham Account Scandal

Consumer Bureau takes action to stop decade-long exploitation of customer data

The Consumer Financial Protection Bureau (CFPB) has initiated an enforcement action against U.S. Bank as a result of U.S. Bank employees illegally accessing customer credit reports to open sham accounts. The action will result in U.S. Bank paying $37.5 million in fines.

The CFPB noted that the scandal came about in response to sales pressure on employees to maximize accounts and fees.

In a statement, the CFPB said the sham account issues at U.S. Bank spanned at least a decade.

“For over a decade, U.S. Bank knew its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts,” said CFPB Director Rohit Chopra. “We all must do more to hold lawbreaking companies accountable when they abuse and misuse our sensitive personal data.”

The CFPB outlined the harms to consumers, including by the creation of unwanted accounts, negative effects on credit profiles, and the loss of control over personally identifiable information. Customers also had to waste time and energy closing unauthorized accounts and resolving consequences stemming from them, including seeking refunds for improperly charged fees.

The enforcement action requires U.S. Bank to:

• Pay a $37.5 million fine: U.S. Bank will pay a $37.5 million penalty to the CFPB, and the CFPB will deposit it into the CFPB’s victims relief fund. This fund provides compensation to consumers harmed by violations of federal consumer financial protection law.
• Forfeit and return all unlawfully charged fees and costs to harmed customers: U.S. Bank must develop a plan to remediate harmed consumers by returning all unlawfully charged fees and costs, plus interest.

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