WASHINGTON (9/29/14)--U.S. Bank has been ordered to provide approximately $48 million in relief to consumers harmed by illegal billing practices. The order came from the Consumer Financial Protection Bureau (CFPB), alleging U.S. Bank customers were unfairly charged for certain identity protection and credit monitoring services that they did not receive.
According to the CFPB order, U.S. Bank's service provider enrolled bank customers in identity protection add-on products that promised to monitor consumers' credit and alert them to potentially fraudulent activity. These credit monitoring programs, known as "Privacy Guard" and "Identity Secure," were marketed by U.S. Bank and administered by its third-party vendor.
In order for a company to provide credit monitoring services, it generally must obtain the consumer's written authorization. U.S. Bank customers were charged for these products as soon as they enrolled and without the necessary authorization.
As a result, consumers were billed for services they did not receive, unfairly incurred charges for interest and fees and failed to receive product benefits.
The CFPB's action is being taken in coordination with the Office of the Comptroller of the Currency (OCC), which is separately ordering restitution for the same illegal practices. These practices were uncovered through supervisory examinations conducted by the CFPB and the OCC.
U.S. Bank will issue the roughly $48 million in refunds to more than 420,000 customers. It also will pay a $5 million civil money penalty to the CFPB and a $4 million penalty to OCC.
Use the resource link below to access the full order.