Magazine article American Banker

CFPB Fines Santander $10 Million for Illegal Overdraft Fees

Magazine article American Banker

CFPB Fines Santander $10 Million for Illegal Overdraft Fees

Article excerpt

Byline: Kate Berry

Santander Bank will pay a $10 million fine for allegedly charging illegal overdraft fees and signing up consumers for overdraft services without their consent, the Consumer Financial Protection Bureau said Thursday.

The CFPB's order said that the $92.3 billion-asset Wilmington, Del., bank deceptively marketed its overdraft service from 2010 to 2014, using a telemarketer to persuade consumers to "opt in" for the service.

The CFPB said the practice violated federal rules that prohibit banks and credit unions from charging overdraft fees on ATM and one-time debit card transactions unless consumers affirmatively opt in.

"Santander tricked consumers into signing up for an overdraft service they didn't want and charged them fees," CFPB Director Richard Cordray said in a press release. "Santander's telemarketer used deceptive sales pitches to mislead customers into enrolling in overdraft service. We will put a stop to any such unlawful practices that harm consumers."

The bureau ordered Santander to go back and directly call consumers to provide affirmative consent to its overdraft service. The bank cannot use a vendor to telemarket its overdraft service and must provide additional oversight of vendors.

Santander acknowledged that it did not sufficiently supervise its vendor. The bank declined to name the vendor because the CFPB did not do so, said Ann Davis, a Santander spokeswoman.

"We regret that the vendor we hired to promote this service may not have followed our instructions and we did not supervise them as closely as we should have," the bank said in a statement. …

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