In an incident that bears striking similarities to the Wells Fargo sales practices scandal that came to light last decade, the Consumer Financial Protection Bureau said on Thursday that US Bank pressured its employees to open fictitious accounts in their customers’ names for more than a decade to meet unattainable sales goals.
(AP) NEW YORK — In an incident that bears striking similarities to the Wells Fargo sales practices scandal that came to light last decade, the Consumer Financial Protection Bureau said on Thursday that US Bank pressured its employees to open fictitious accounts in their customers’ names for more than a decade to meet unattainable sales goals.
According to the Consumer Financial Protection Bureau (CFPB), US Bank opened checking and savings accounts, credit cards, and lines of credit for individuals without getting their consent. To achieve the bank’s objectives of selling many goods to each consumer, employees were urged to do this.
The CFPB withheld information on the scope of US Banks’ bogus account problem, but the bank was ordered to pay $37.5 million in fines and penalties and would be required to reimburse clients for any fees they paid for the established accounts.
According to a statement by CFPB Director Rohit Chopra, “For more than a decade, U.S. Bank knew its employees were exploiting its clients by misusing consumer data to create bogus accounts.”
The fifth-largest bank in the nation, US Bank, did not immediately respond to a request for comment.
About six years ago, the Wells Fargo sales practices scandal shook the financial industry when it was discovered that the bank had encouraged staff to open millions of fictitious accounts to reach sales targets. The incident destroyed Wells Fargo’s reputation, resulted in billions of dollars worth of fines against the institution, and almost immediately prompted the CEO and later the board of directors of the bank to quit.
Since that incident broke, Wells has been closely regulated by the Federal Reserve, preventing the bank from expanding unless it improves its worker culture.
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