U.S. Bank hit with stiff fines for illegal billing
U.S. Bank was ordered to pay $48 million to more than 420,000 customers who were charged for identity theft protection and credit monitoring, but received neither, the Consumer Financial Protection Bureau announced on Thursday.
In addition, the bank must pay a $5 million penalty to the CFPB and another $4 million penalty to the Office of the Comptroller of the Currency.
The services were add-ons for those who used the bank's credit cards, checking accounts or mortgage loans, according to the bureau. "Consumers were charged fees even though U.S. Bank or its vendors had not obtained the authorization necessary to begin monitoring the consumers' credit information," the CFPB said.
"Today's action will provide $48 million in relief to U.S. Bank customers who were illegally charged for identity protection services they did not receive," CFPB Director Richard Cordray said in a statement. "We have consistently warned companies about practices related to add-on products and we will do what is necessary to prevent further harm to consumers. "
The services the customers were charged for were marketed by the bank and but were to be provided by a vendor. Even though the services were not provided, the CFPB said, U.S. Bank continued to charge fees for them, in some cases, for years.
In addition, being charged, these fees caused some customers to exceed their credit limits, which resulted in additional fees and interest, the agency said. On top of that, many consumers believed their accounts were being monitored to help detect identity theft and fraud, but were not.
