The Consumer Financial Protection Bureau has ordered TD Bank to pay nearly $28 million in redress to consumers and fines as a result of sharing inaccurate, negative information about its customers to credit reporting agencies. This action highlights the CFPB’s continued focus on accurate credit reporting and proper handling of consumer disputes.
What happened: The CFPB’s investigation, which began in 2021, uncovered that TD Bank had been furnishing inaccurate information to consumer reporting agencies for years. In many cases, this inaccurate data included details related to credit card delinquencies, account closures, and bankruptcies. Despite being aware of the errors, TD Bank took far too long to correct them, sometimes waiting months or even years before addressing the inaccuracies.
Key violations included:
- Failure to correct inaccuracies: TD Bank reported wrong information about credit card accounts, including delinquency statuses and charge-offs, affecting tens of thousands of accounts.
- Sharing fraudulent information: Hundreds of thousands of deposit accounts, suspected or confirmed to be fraudulently opened, were reported as legitimate, negatively impacting consumers’ credit.
- Inadequate dispute investigations: When consumers disputed the erroneous information, TD Bank failed to conduct proper investigations, often ignoring the complaints entirely.
Between the lines: According to the CFPB’s findings, TD Bank’s violations extended beyond the FCRA and also breached the Consumer Financial Protection Act. The bank’s practices were deemed abusive, as they took advantage of consumers’ inability to protect themselves, especially when it came to ensuring the accuracy of their own credit reports. The Bureau noted TD Bank diverted resources from investigating disputes to other parts of its business, suggesting a prioritization of growth over compliance.
The last word: CFPB Director Rohit Chopra emphasized that TD Bank’s violations reflect a culture that prioritized growth over consumer protection: “Rather than treating its customers fairly and following the law, TD Bank’s management clearly cared more about expanding its empire. Regulators will need to focus major attention on TD Bank to change its course.”
