On 8/20/2020, the CFPB issued a settlement with TD Bank, N.A. regarding the marketing and sale of its overdraft program, known as Debit Card Advance (DCA), as well as violations of the FCRA. In their release, the CFPB said the following:
“The Bureau specifically found that TD Bank charged consumers overdraft fees for ATM and one-time debit card transactions without obtaining their affirmative consent in violation of EFTA and Regulation E, both after new customers opened checking accounts at TD Bank branches and after new customers opened checking accounts at events held outside of Bank branches.”
“The Bureau further found that when presenting DCA to new customers, TD Bank deceptively claimed DCA was a “free” service or benefit or that it was a “feature” or “package” that “comes with” new consumer-checking accounts. In fact, TD Bank charges customers $35 for each overdraft transaction paid through DCA and DCA is an optional service that does not come with a consumer-checking account. When TD Bank enrolled some consumers in DCA over the phone, TD Bank deceptively described DCA as covering transactions unlikely to be covered by DCA. In some instances, TD Bank engaged in abusive acts or practices by materially interfering with consumers’ ability to understand DCA’s terms and conditions. In some cases, TD Bank: required new customers to sign its overdraft notice with the “enrolled” option pre-checked without mentioning the DCA service to the consumer at all; enrolled new customers in DCA without requesting the customer’s oral enrollment decision; and deliberately obscured, or attempted to obscure, the overdraft notice to prevent a new customer’s review of their pre-marked “enrolled” status in DCA.”
“The Bureau also found that TD Bank violated FCRA and Regulation V by failing to establish and implement reasonable written policies and procedures concerning the accuracy and integrity of consumer-account information it furnished to two nationwide specialty consumer reporting agencies. The Bureau also found that TD Bank failed to conduct timely investigations of indirect consumer disputes concerning its furnishing to one of those specialty agencies.”
The consent order also requires restitution to about 1.42 million consumers totaling $97 million as well as a $25 million civil money penalty.
The full 53-page CFPB consent order can be found here.