The US Bank is fined. On Thursday, on the word of Reuters, US financial regulators said that US Bank will pay about $57 million to resolve charges for services that the consumers did not actually receive.
The US Bank, a US Bankcorp unit, would pay a total of $9 million in fines and about $48 million in reimbursement to affected debtors, the US Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau (CFPB) said.
The US regulators said that US Bank presented identity theft fortification and credit monitoring services as "supplements" to mortgages and checking accounts. Some debtors were charged for the services albeit they never activated them, while some waged for the products for years without receiving any benefits.
Bank regulators have been tracking down on selling and billing practices tied to those extra products. The CFPB said it has taken seven implementation actions involving such products, including fines against Bank of America, JPMorgan Chase and Discover. US Bank neither admitted nor denied the discoveries.
In a statement on Thursday, CFPB Director Richard Cordray said that they have unswervingly cautioned companies about practices related to supplementary products and that they will do what is needed to prevent further harm to consumers. Regulators said the supplementary products were sold by US Bank and by a third-party seller.
Bank Spokesperson Dana Ripley said that US Bank terminated its relationship two years ago with the seller, Affinion Group. Dana said, "We will be compensating customers who did not receive full services from Affinion, and providing our apology."
Meanwhile, a spokesman for Affinion Group, Michael Bush said that the problem was associated to a condition that consumers submit validating data before they could receive the service. CFPB also said that some consumers certainly not provided the information but were charged anyway.
Affinion Group also provided services to Capital One Financial, which was fined in 2012 by financial regulators over supplementary products. Michael Bush of Affinion Group said on Thursday that they pro-dynamically constructed and instigated a solution over two years ago to acquire the required approvals upon registration of their service.
The consumer bureau was formed by the 2010 Dodd-Frank law and charged with supervising products such as mortgages and credit cards. The OCC superintends national banks. Regulators said US Bank need to provide reimbursements to over 420,000 clienteles who paid for services they did not receive. The agencies also stated that it also must improve its oversight of supplementary products and external service providers.
The case of the US Bank will serve as a moral to other companies who offer similar products and services. The US Bank is fined to pay $57 million for resolution of their valued clienteles' unwarranted charges without actually receiving the products and services.
