The American subsidiary of Canada’s Toronto-Dominion Bank will pay nearly $28 million in restitution and penalties for allegedly giving incorrect information about tens of thousands of U.S. customers to consumer reporting companies, potentially damaging their credit record.
TD Bank shared data including personal bankruptcies, credit card delinquencies and bank accounts that it “knew or suspected were fraudulently opened,” the Consumer Financial Protection Bureau announced on Wednesday. The bank also was slow to correct the faulty information it provided to the consumer data companies.
“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,” CFPB Director Rohit Chopra said in a statement.
According to a consent order filed Wednesday, TD Bank agreed to pay nearly $7.8 million to consumers impacted by its fraudulent or inaccurate reports, along with a $20 million civil penalty. The company also agreed to an array of measures to improve its reporting and compliance practices.
The case involves information shared for employment and tenant screening — data that can impact an individual’s job prospects, ability to obtain credit and secure housing, the CFPB stated.
“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,” Chopra said.
A spokesperson for TD Bank said the company took action to address the problem before the CFPB settlement.
“Long before this settlement, TD self-identified these matters and voluntarily and proactively implemented enhancements to our furnishing and dispute handling practices. TD cooperated fully to resolve this matter and is committed to continuing to deliver on its responsibilities to its customers,” a spokesperson for the bank told CBS MoneyWatch in an email.
The action announced Wednesday is the second by the agency against TD Bank. CFPB in 2020 ordered it to pay $97 million in restitution to about 1.4 million consumers and pay a $25 million fine for illegal overdraft practices.