TD Bank has been fined $28 million by the Consumer Financial Protection Bureau (CFPB) for allegedly providing inaccurate and negative information about its customers to consumer reporting agencies. This misconduct reportedly affected hundreds of thousands of consumers, making it more difficult for them to secure credit, housing, and employment.
According to the CFPB, TD Bank shared flawed data related to credit card delinquencies and bankruptcies, among other issues. The bank was found to have transmitted inaccurate information to credit reporting agencies, even when it suspected that some of the accounts were fraudulent. Despite becoming aware of fraudulent or suspicious deposit account openings as early as January 2022, TD Bank continued sharing incorrect data well into 2023.
As part of the settlement, nearly $8 million of the $28 million fine will be distributed to customers harmed by the bank’s practices. The CFPB noted that TD Bank violated both the Fair Credit Reporting Act and the Consumer Financial Protection Act, further compounding its legal troubles. The bank was also criticized for its lack of proper investigation into customer disputes, with many complaints going unaddressed or receiving inadequate attention.
TD Bank has acknowledged the issues but claims to have taken steps to rectify the situation before the settlement. A spokesperson stated that the bank voluntarily implemented improvements to its dispute-handling practices and cooperated fully with the investigation.
However, CFPB Director Rohit Chopra emphasized that the bank’s management prioritized growth and expansion over fair treatment of customers. He called for regulators to keep a close watch on the bank’s future practices.
This is not the first time TD Bank has faced scrutiny from the CFPB. In 2020, the bank paid $97 million to settle charges related to illegal overdraft practices, further illustrating a pattern of misconduct.
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