US Bank opened fake accounts, CFPB says

NEW YORK — For more than a decade, U.S. Bank pressured its employees to open fake accounts in their customers’ names in order to meet unrealistic sales goals, the Consumer Financial Protection Bureau said Thursday, in a case that is deeply similar to the sales practices scandal uncovered at Wells Fargo in the previous decade.

The CFPB alleged that U.S. Bank accessed consumers credit reports to open checking and savings accounts, credit cards and lines of credit without their permission. Employees were encouraged to do so in order to meet the bank’s goals of selling multiple products to each customer with the bank.

The scale of the fake accounts scandal by U.S. Bank was not disclosed immediately by the CFPB, but the bank was forced to pay $37.5 million in fines and penalties and will have to refund customers any fees they paid for the fake accounts.

“For over a decade, U.S. Bank knew its employees were taking advantage of its customers by misappropriating consumer data to create fictitious accounts,” said CFPB Director Rohit Chopra in a statement.

A spokesman for U.S. Bank said the bad sales practices were a legacy issue at the bank dating back to 2016, and that the bank has made significant improvements to its sales practices since then. The consent order reached with the CFPB acknowledges that U.S. Bank did make improvements to its sales practices in recent years, which included no longer tying pay to opened accounts and requiring customers’ consent to open new services.

Wells Fargo’s sales practices scandal rocked the financial world half a decade ago, when the bank was found to have encouraged employees to open millions of fake accounts to meet sales goals.