TD to pay $28 million for sharing inaccurate US consumer data

Toronto-Dominion Bank will pay nearly $28 million in fines and restitution after the Consumer Financial Protection Bureau said the lender shared inaccurate information about tens of thousands of U.S. customers with consumer reporting companies.

A CFPB investigation found the information included personal bankruptcies and credit card delinquencies, as well as bank accounts that “TD Bank knew or suspected were fraudulently opened,” the agency said in a statement Wednesday. “After the bank realized it was misreporting to consumer reporting companies, it took far too long to correct many of its errors.”

The information TD shared was for a range of consumer reports, including job and tenant assessments and other background reports, the types of data that can affect consumers’ job prospects, access to credit and ability to pay. to insure housing, according to the CFPB.

The bank agreed in a consent order filed Wednesday to pay $7.76 million to tens of thousands of consumers affected by the fraudulent or inaccurate reports and a $20 million civil penalty. It also agreed to a number of reporting and compliance measures.

“Well in advance of this settlement, TD self-identified these issues and voluntarily and proactively implemented improvements to our provisioning and dispute handling practices,” bank spokeswoman Miranda Garrison said via email. “TD has cooperated fully to resolve this matter and is committed to continuing to fulfill its responsibilities to its customers.”

The fine is the latest black eye for the Canadian bank, which has a large US operation with more than 10 million customers. It already faces allegations that it failed to catch money laundering and other financial crimes at numerous U.S. branches.

TD hopes to resolve several inquiries with US authorities, including the Department of Justice, about the expiration of its anti-money laundering compliance by the end of the year. The bank expects to pay more than $3 billion in fines, and analysts said it could also face restrictions on future acquisitions and organic growth in the country.

“Expanding His Empire”

Rohit Chopra, director of the CFPB, said that instead of treating its customers fairly, TD cares more about “growing and expanding its empire through mergers.”

“The CFPB’s investigation found that TD Bank illegally threatened its customers’ reports with fraudulent information and then barely lifted a finger to fix them,” Chopra said. “Regulators will need to focus major attention on TD Bank to change course.”

The CFPB said that by January 2022, the bank had identified hundreds of thousands of deposit account openings that were “either confirmed or suspected to be fraudulent.”

By April 2023, the agency said that “instead of ensuring that only accurate information about its customers was sent to consumer reporting companies, TD Bank continued to share fraudulent information about those accounts as if they belonged to the bank’s customers.”

The CFPB also said the bank reported inaccurate information about credit card accounts to consumer reporting companies and lacked adequate processes for investigating and resolving consumer reporting disputes.

Top Photos: A man walks past a Toronto-Dominion (TD) Canada Trust bank branch in the financial district of Toronto, Ontario, Canada, Thursday, July 25, 2019. Photographer: Brent Lewin/Bloomberg.

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