U.S. Regulator Orders TD Bank to Pay $28 Million for Misrepresentation of Customer Data

By Adriano Marchese

The U.S. consumer-protection watchdog has ordered Toronto-Dominion Bank to pay $28 million in penalties and redress over allegations it illegally misrepresented information about its customers.

The Consumer Financial Protection Bureau on Wednesday said the Canadian financial institution repeatedly and for several years shared inaccurate, negative information about its customers to consumer-reporting companies, including systemic errors about credit-card delinquencies and bankruptcies.

The CFPB is an independent agency of the federal government that is responsible for consumer protection in the financial sector.

TD Bank couldn't be reached immediately for comment.

For the bank's actions, the regulator is requiring TD Bank to pay $7.8 million to victims, which the CFPB said are in the tens of thousands, and a $20 million civil penalty.

The data collected by consumer-reporting companies is important to paint a comprehensive picture of the consumer. Consumer reports include information on credit, tenant and employment screening and other background data.

"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," CFPB Director Rohit Chopra said.

TD Bank is currently under investigation in the U.S. for poor protections against money laundering which its chief executive, Bharat Masrani, has said allowed for criminal activity to go unstopped on multiple occasions. The company posted a loss in its most recent quarterly earnings report, largely due to the $2.6 billion it put aside to cover penalties related to failures in their anti-money-laundering program.

The bank could face up to $4 billion worth of fines over its money-laundering controls.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

September 11, 2024 10:06 ET (14:06 GMT)

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