TD Bank faces scrutiny for inaccurate customer data reporting in the US
- TD Bank provided incorrect information about tens of thousands of U.S. customers to consumer reporting agencies, including data on bankruptcies and delinquencies.
- The bank will pay nearly $28 million in restitution and penalties, with $7.8 million going to affected consumers and a $20 million civil penalty.
- Regulatory scrutiny is expected to continue as TD Bank works to improve its reporting practices and address the issues raised by the CFPB.
The American subsidiary of Toronto-Dominion Bank has faced significant scrutiny for providing inaccurate customer data to consumer reporting agencies, affecting tens of thousands of U.S. customers. The Consumer Financial Protection Bureau (CFPB) announced that the bank reported incorrect information regarding personal bankruptcies, credit card delinquencies, and accounts suspected of being fraudulently opened. This misinformation has the potential to severely damage customers' credit records, impacting their ability to secure loans, jobs, and housing. In response to the investigation, TD Bank has agreed to pay nearly $28 million in restitution and penalties. This includes approximately $7.8 million allocated to consumers who were adversely affected by the bank's erroneous reports, alongside a $20 million civil penalty. The CFPB's findings highlighted that the bank was slow to rectify the inaccurate information it had provided, further exacerbating the situation for its customers. CFPB Director Rohit Chopra criticized TD Bank's management for prioritizing growth over customer welfare, indicating a need for regulatory oversight to ensure the bank changes its practices. The case also involves data shared for employment and tenant screening, which can significantly influence an individual's job prospects and housing opportunities. A spokesperson for TD Bank stated that the bank had already begun addressing these issues prior to the settlement, claiming to have self-identified the problems and implemented improvements in their data reporting and dispute handling processes. The bank expressed its commitment to fulfilling its responsibilities to its customers moving forward.