WASHINGTON— The Consumer Financial Protection Bureau (CFPB) has ordered TD Bank to pay $7.76 million to tens of thousands of what it called the “victims of the bank’s illegal actions” for allegedly repeatedly shared inaccurate, negative information about its customers to consumer reporting companies.
The information included systemic errors about credit card delinquencies and bankruptcies, the CPFB said.
In addition to the redress, the CFPB is ordering TD Bank to pay a $20 million civil money penalty.
“The inaccurate information shared by TD Bank related to credit card and bank deposit accounts, including accounts TD Bank knew or suspected were fraudulently opened,” according to the Bureau. “After the bank realized it was botching its reporting to consumer reporting companies, it took far too long to correct many of its errors.”
TD Bank, N.A. is a national bank headquartered in Cherry Hill, N.J., one of many subsidiaries of Toronto-based Toronto-Dominion Bank. TD Bank Group collectively reported Can$489 billion in assets under management as of Q2 2024.
What Investigation Found
The CFPB alleged its investigation found that for several years TD Bank repeatedly gave inaccurate account information to consumer reporting companies.
“At times, the information contained systemic errors about personal bankruptcies and credit card delinquencies,” the CFPB said. “Other times, the bank gave consumer reporting companies information it knew or suspected was fraudulent. The bank knew of many of these inaccuracies for more than a year before fixing them. Additionally, when customers or consumer reporting companies submitted disputes to TD Bank, it failed to conduct proper investigations and sometimes to conduct any investigation at all.”
The CFPB said TD Bank’s actions affected hundreds of thousands of its customers and that its actions violated both the Fair Credit Reporting Act and the Consumer Financial Protection Act.
The Specifics
Specifically, the CFPB said TD Bank harmed consumers by:
- Failing to fix its credit card reporting errors. “TD Bank reported inaccurate information about its customers’ credit card accounts to consumer reporting companies. Even though it knew it was sending incorrect information for consumer reports, the bank failed to promptly correct its mistakes. In some instances, TD Bank shared inaccurate information about credit card delinquencies. In other instances, the bank shared information that made it look like accounts were in use even though customers had voluntarily closed them.”
- Sharing fraudulent information with consumer reporting companies. “By January 2022, TD Bank identified hundreds of thousands of deposit account openings that were either confirmed or suspected to be fraudulent. By April 2023, instead of making sure only accurate information about its customers was sent to consumer reporting companies, TD Bank kept sharing fraudulent information about those accounts as if it belonged to the bank’s customers. Derogatory information, including information that some of the fraudulent accounts were overdrawn, was shared with consumer reporting companies.”
- Failing to investigate and resolve consumer disputes. “TD Bank did not have sufficient processes in place to investigate consumer reporting disputes and diverted resources from investigating disputes to other parts of its business. It then, among other things, failed to conduct reasonable and timely investigations of consumer disputes, including sometimes by not conducting any investigation at all. It also failed to properly notify consumers after deeming a dispute frivolous or irrelevant.”
Enforcement Action
The CFPB’s order requires TD Bank, among other things, to:
- Pay redress to affected consumers: TD Bank must pay $7.76 million in redress to tens of thousands of consumers affected by its unlawful behavior.
- Pay a $20 million penalty: TD Bank will pay $20 million to the CFPB’s victims relief fund.
The full order can be found here.