CFPB finds TD Bank shared false info, impacting US customers' credit and background checks
Toronto-Dominion Bank (TD) will pay close to US$28m in fines and restitution after an investigation by the Consumer Financial Protection Bureau (CFPB) revealed the bank shared inaccurate data about tens of thousands of US customers with consumer reporting companies, according to BNN Bloomberg.
The CFPB investigation uncovered that TD Bank reported incorrect information, such as personal bankruptcies, credit card delinquencies, and accounts that “TD Bank knew or suspected were fraudulently opened.”
Despite recognizing its errors, TD took an extended period to correct them, according to the agency’s Wednesday statement.
The inaccurate data was shared in consumer reports used for job and tenant screenings and other background checks, which can significantly affect customers' access to credit, employment, and housing.
The bank has agreed to pay US$7.76m to the impacted customers and an additional US$20m civil penalty. Furthermore, TD must implement new reporting and compliance measures as part of the settlement.
Miranda Garrison, a spokesperson for TD, stated, “Long before this settlement, TD self-identified these matters and voluntarily and proactively implemented enhancements to our furnishing and dispute handling practices.”
She further emphasized the bank's cooperation and commitment to resolving the matter and fulfilling its responsibilities to its customers.
This penalty comes at a time when TD, which operates a large US branch network with over 10 million customers, is already dealing with allegations of failing to prevent money laundering and other financial crimes at its US branches.
TD is working to resolve ongoing investigations by US authorities, including the Department of Justice, by the end of the year. These settlements could exceed $3bn in fines, with analysts suggesting the bank may face restrictions on future acquisitions and growth in the US.
Rohit Chopra, the director of the CFPB, criticized TD Bank’s focus on “growth and expanding its empire through mergers” instead of ensuring fair treatment for its customers.
Chopra stated, “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.” He added that regulators would need to carefully monitor the bank to ensure it changes its approach.
The CFPB reported that by January 2022, TD had identified hundreds of thousands of deposit accounts that were either confirmed or suspected to be fraudulent.
However, by April 2023, the bank continued to provide consumer reporting companies with incorrect information about these accounts, as if they belonged to legitimate customers.
The agency also found that TD reported inaccurate data about credit card accounts and lacked proper processes for investigating and resolving disputes related to consumer reporting.
