TD sanctioned for credit reporting violations

TD Bank’s U.S. subsidiary has been ordered to pay US$28 million in customer redress and penalties for allegedly sharing incorrect, negative information about consumers’ banking records with credit reporting bureaus.

The U.S. Consumer Financial Protection Bureau (CFPB) ordered New Jersey-based TD Bank N.A. to pay US$7.8 million in redress to consumers, and a US$20 million penalty, after its investigation found that the bank repeatedly provided inaccurate information about its customers to consumer reporting companies — including information on accounts that were closed and accounts that the bank had found were opened fraudulently.

“At times, the information contained systemic errors about personal bankruptcies and credit card delinquencies. Other times, the bank gave consumer reporting companies information it knew or suspected was fraudulent,” the CFPB said — adding that, after the bank realized the problems with its credit reporting, “it took far too long to correct many of its errors.”

As a result, the regulator said, the bank violated both the Fair Credit Reporting Act and the Consumer Financial Protection Act.

The bank agreed to the CFPB issuing its consent order, without admitting or denying any of the agency’s findings.

“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,” said CFPB director, Rohit Chopra, in a release.

“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,” he added.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.