U.S. regulator orders TD Bank to pay $28 million for sharing ‘inaccurate’ consumer credit data

The agency representing U.S. financial consumers has ordered Toronto-based TD Bank to pay $28 million (U.S.) for repeatedly sharing “inaccurate” and “negative” information about its customers to credit bureaus, potentially harming the credit scores of thousands of consumers. 
The Consumer Financial Protection Bureau (CFPB) said in a statement on Wednesday that, for years, the bank reported systemic errors about credit card delinquencies and bankruptcies to providers of consumer reports such as Equifax and TransUnion, which also operate in Canada.
Other times, it alleges the bank gave them information about accounts it knew or suspected were fraudulent. 
The bureau added that the bank was aware of many of these inaccuracies, but took “far too long” to correct them — sometimes longer than a year. 
Such reports are often used by landlords and financial institutions when deciding whether to grant housing or loans to a consumer. 
“The CFPB’s investigation found that TD Bank illegally threatened the consumer reports of its customers with fraudulent information and then barely lifted a finger to fix it,” said CFPB director Rohit Chopra. 
“Rather than treating its customers fairly and following the law, TD Bank’s management clearly cared more about growth and expanding its empire through mergers.” 
When asked if TD is expecting any penalties from Canadian regulators regarding the same issue, TD spokesperson Miranda Garrison said “this is U.S. specific,” adding that the accounts that are part of the CFPB order were supplied only to U.S. consumer reporting agencies. 
Garrison did not confirm or deny any wrongdoing in Canada. 
“Long before this settlement, TD self-identified these matters and voluntarily and proactively implemented enhancements to our furnishing and dispute handling practices,” Garrison said. 
“TD co-operated fully to resolve this matter and is committed to continuing to deliver on its responsibilities to its customers.” 
The Financial Consumer Agency of Canada said it is still confirming if there are any implications within its mandate. 
Equifax Canada said it is not aware of any issues, while TransUnion did not respond to the Star’s request for comment. 
In a consent order filed Wednesday, TD agreed to pay $7.76 million (U.S.) to consumers affected and $20 million (U.S.) in civil money penalty to the bureau, which will be directed to a victims relief fund. 
TD has been at the centre of regulatory scrutiny lately, as it recently disclosed an unrelated $2.6 billion (U.S.) provision to cover penalties from money laundering investigations by the U.S. Department of Justice. 
In one of the probes, investigators allege Chinese drug traffickers used TD and other financial institutions to launder at least $653 million (U.S.) in proceeds from fentanyl sales, including by bribing the bank’s employees to do so. The bank said it continues to strengthen its anti-money laundering program and that a global resolution is expected by year end.