CFPB Orders TD Bank to Pay $28 million

Earlier this week, the Consumer Financial Protection Bureau (CFPB) ordered TD Bank to pay $28 million in fines and redress for illegal practices that damaged consumers’ credit reports. What kind of illegal practices? The CFPB alleges that for years, TD Bank knowingly shared inaccurate and fraudulent information with consumer reporting agencies, including false claims about credit card delinquencies and bankruptcies, making it difficult for thousands of consumers to access credit, housing, and employment. Some errors even involved fraudulently opened accounts, yet TD Bank delayed fixing them for over a year even after discovering the fraud.

This case highlights the importance of understanding your rights under the Fair Credit Reporting Act (FCRA) and holding financial institutions accountable. We’ll explain what happened, why it matters, and what you can do if this affects you.

Here’s a quick breakdown of the penalties:

• $7.76 million will go directly to consumers harmed by TD Bank’s actions.
• $20 million will be paid as a civil money penalty.

This isn’t the first time TD Bank has faced the CFPB’s scrutiny. In 2020, the bank was hit with $122 million in penalties for illegal overdraft practices. Clearly, this institution has a history of mistreating its customers, which raises the question: Why does this keep happening?

Maybe It Was an Oversight?

Mistakes happen. Anyone can forget to dot an “i” or cross a “t,” right? But because banks' “i’s” and “t’s” directly impact people’s financial well-being, the law says that financial institutions have to use reasonable care to prevent those mistakes from happening. Even when they do happen, the law allows banks to correct them.

The CFPB’s press release sheds light on just how negligent, brazen, and dismissive of the laws around consumers' rights TD Bank’s actions were. Not only did they knowingly send inaccurate information to consumer reporting agencies, but they also failed to correct the errors promptly. Even when customers disputed the fraudulent charges or mistakes, the bank didn’t bother to investigate properly—or at all in some cases. Imagine disputing a charge that doesn’t belong to you, only to have the bank ignore your complaint.

Here’s where TD Bank really crossed the line:

TD Bank’s actions blatantly violated consumer trust and legal obligations by:

• Reporting false credit card delinquencies. TD Bank falsely labeled customers as delinquent on accounts closed or paid off.
• Sharing fraudulent account information. The bank knowingly reported fraudulent accounts as legitimate, damaging the credit of people who never opened those accounts.
• Neglecting dispute investigations. When customers disputed errors, TD Bank often failed to investigate properly, leaving many consumers without answers or even notification of rejected disputes.
• Neglecting accuracy in reporting. TD Bank consistently shared inaccurate information with credit agencies, even when they knew the accounts were fraudulent or closed.
• Failing to correct mistakes. TD Bank delayed corrections, leaving consumers with damaged credit for over a year after realizing their errors.
• Refusing to investigate disputes. TD Bank often ignored consumers' complaints and failed to conduct required investigations.

TD Bank’s illegal practices put consumers in impossible situations. Think about it: your credit report impacts almost every aspect of your financial life. So, TD Bank didn’t just mess up—they knowingly damaged consumers’ credit reports and left them to pick up the pieces!

TD Bank’s Failures Show a Pattern of Harm

What’s truly troubling is that TD Bank’s actions weren’t just a one-off mistake. They reflect a pattern of negligence and disregard for consumer rights. These actions not only violated the FCRA, but they also demonstrated a blatant disregard for the rights and well-being of TD Bank’s customers.

When people break the law, they pay the consequences, right?

When a business treats its customers so poorly, those customers can do something about it, right?

What Is the Fair Credit Reporting Act (FCRA)?

The Fair Credit Reporting Act (FCRA) is a federal law that was passed to protect consumers from having inaccurate information on their credit reports. Under the FCRA, companies that furnish information to consumer reporting agencies are required to make sure that the information is accurate and complete. They must also investigate any disputes filed by consumers and correct any errors they find.

The FCRA gives you the right to:

• Dispute inaccurate information on your credit report.
• Have negative information removed after a certain period (like seven years for most delinquencies).
• Be notified if adverse action (like a denial of credit) is taken against you because of your credit report.

TD Bank is a furnisher of information; consumer reporting agencies are companies like Equifax, Experian, and TransUnion that compile that information and then sell it to lenders. When companies like TD Bank violate the FCRA, they can face penalties like the ones imposed by the CFPB, but the real damage is done to the consumers whose credit is unfairly tarnished.

The Relationship Between Banks, Consumer Reporting Agencies, and Consumers

To understand how TD Bank’s actions affected consumers, it’s important to understand the relationship between banks, consumer reporting agencies, and consumers.

• Banks like TD Bank provide information about your accounts—such as payment history, balances, and account status—to consumer reporting agencies (like Equifax, Experian, and TransUnion).
• These agencies then compile the information into credit reports, which are used by lenders, landlords, employers, and others to decide whether to offer you credit, housing, or even a job.

If a bank reports incorrect information, it gets reflected in your credit report. That means your credit score can plummet, making it harder to access the things you need to live your life. When this happens, it’s the consumer who suffers the most.

How Flawed Credit Reports Affect Consumers

The damage caused by inaccurate credit reports can be devastating. Here’s what can happen when banks like TD Bank mishandle your information:

• Denied credit: A low credit score can prevent you from getting approved for loans, credit cards, or even basic utilities.
• Higher interest rates: Even if you get credit approval, a damaged score can mean higher interest rates. Higher interest rates over the course of a loan result in significant losses.
• Lost job opportunities: Many employers check credit reports for their hiring process. A flawed report could cost you a job offer.
• Difficulty renting: Landlords often look at credit reports when deciding whether to approve a tenant. A bad report could keep you from finding a place to live.

When your credit report is damaged through no fault of your own, it can feel like the entire system is stacked against you—and unfortunately, it often is. Banks and consumer reporting agencies should be held accountable for the harm they cause when they fail to protect your information.

What is Regulation V of the FCRA?

The Fair Credit Reporting Act (FCRA) protects consumers from inaccurate or unfairly reported credit information. It not only provides critical legal rights to consumers but also imposes strict responsibilities on companies that furnish information to consumer reporting agencies, such as banks, credit card companies, and other financial institutions. These institutions must ensure the accuracy and completeness of the information they report.

Regulation V is the specific part of the FCRA that governs these obligations. It requires companies that furnish information - like TD Bank, which sends information to consumer reporting agencies - to establish written policies and procedures to ensure the accuracy and integrity of the data they report.

Here's what Regulation V mandates these companies to do:

• Report accurate information: Furnishers must provide consumer reporting agencies with correct and up-to-date information.
• Correct mistakes promptly: If an error is found, they must fix it without delay.
• Investigate disputes: When a consumer disputes information on their credit report, the furnisher must investigate and resolve the issue within 30 days.

In the case of TD Bank, its actions violated Regulation V by reporting inaccurate information and failing to properly address disputes raised by consumers. When furnishers like TD Bank neglect their obligations under the FCRA, consumers bear the brunt of the damage - often with their credit unfairly tarnished for years.

TD Bank must follow Regulation V. It’s a law. It’s not optional. The law guarantees that your information will be accurate when a lender, employer, or landlord reviews it.

For a more in-depth discussion of your rights under the FCRA, click here. If you're facing issues with inaccurate credit reporting, contact a consumer protection attorney to help you enforce your rights under the FCRA.

What Can You Do If Your Credit Report Is Wrong?

Sadly, what TD Bank has done for years is neither rare nor If you find inaccuracies on your credit report—especially ones that stem from the actions of TD Bank and banks like TD Bank—you don’t have to fight the system alone. Here’s what you can do:

1. Dispute the Errors: File a dispute with the credit bureaus to have the inaccuracies corrected. Under the FCRA, they are required to investigate and respond within 30 days. For more on how to handle this, click here.
2. Document Everything: Keep records of any communication with your bank and the credit bureaus, including dates, names, and copies of letters or emails.
3. Contact a Lawyer: When banks fail to correct their mistakes, it’s time to call in legal help. At Consumer Attorneys, we have years of experience fighting for consumers whose rights under the FCRA have been violated. We can help you navigate the dispute process, hold the responsible parties accountable, and make sure you get the compensation you deserve.

Why We Do What We Do

As someone who’s built a law firm from the ground up, I understand the pressures of running a business. There’s a constant balance between growth, client service, and the bottom line. Black ink is good. Red ink is bad. But make no mistake: compliance costs are not optional. Just like any other cost of doing business, like renting office space and paying the electricity bills, the responsibility to uphold the law is non-negotiable.

Meanwhile, the CEO of TD Bank raked in over $13 million last year - in the midst and the wake of several probes, blunders, and failures. That’s infuriating. People rely on banks. Banks safeguard their finances, their financial well-being, their financial lives, and their lives. Banks must be trustworthy and competent stewards of their money, including money related to credit. It’s the foundation of our financial system. The failure to honor those basic expectations isn’t just negligence—it’s a breach of trust.

At my law firm, people rely on us too. So much so that we know that we’re not “just’ a business. We’re fighting for consumers’ rights and protecting the everyday person from the damage these reckless corporations cause. We take that responsibility seriously, and I expect financial institutions to do the same.

When a bank is entrusted with your financial future, it owes it to you to follow the rules. The fact that TD Bank has repeatedly failed to do that while its top executives cash out is not just a violation of the law; it’s a slap in the face to every consumer who counted on them to get it right. At Consumer Attorneys, we believe that no one should suffer because of the negligence or greed of big banks and consumer reporting agencies. The damage that TD Bank inflicted on its customers is exactly why we do what we do. You have rights, and when banks violate those rights, we step in to fight for you.

If TD Bank’s actions or inactions have impacted your life, or if you’ve found inaccuracies on your credit report, don’t wait. We know that you won’t necessarily know whether you need a lawyer until you talk to a lawyer. So, we invite you to call or contact us today to schedule your free consultation. Let us help you get your life back on track. You deserve better, and we’re here to make sure you get it.