The Consumer Financial Protection Bureau (CFPB) has ordered Atlantic Union Bank to make at least $5 million in customer refunds for illegal overdraft fees.
This order, announced Thursday, came after a CFPB investigation found Atlantic Union violated federal regulations related to enrolling customers in its Opt-In Overdraft Protection program.
In the findings, the CFPB explained that regulations require a bank to provide customers with disclosures about such as service in writing before they sign up. Doing so is required for the bank to have legal “affirmative consent.”
But from 2017 through most of 2020, the CFPB said when customers opened checking accounts in a branch, employees presented the overdraft service orally, entered customers’ oral consent into the computer system, then provided the required disclosures sometime afterward.
Also, the CFPB said Atlantic Union violated federal regulations in how it enrolled customers in the service over the phone. Phone agents weren’t provided a script to outline fees and features of the program and they provided misleading information or omitted key details, the order noted.
For example, customers were told the overdraft service provided them emergency funds when they needed them without the context of the associated costs, the CFPB stated. And, phone agents failed to disclose that each transaction the bank covered could cost from $36 to $38.
The CFPB said, for the bulk of that 2017 – 2020 timeframe, Atlantic Union was charging $36 per transaction for this overdraft service and allowing customers to be hit with six fees per day.
The CFPB also noted that it reviewed the recorded calls between the bank and its customers, which revealed that many customers were confused and lacked understanding of the service. CFPB concluded that the bank was likely intending to mislead customers and said the misrepresentations and omissions during those calls “constitute deceptive acts and practices.”
“Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices,” said CFPB Director Rohit Chopra.
Atlantic Union does not admit to any wrongdoing, past or present, the bank said in a statement. But it agreed to pay the millions for customer refunds and a $1.2 million penalty to the CFPB.
Atlantic Union CEO John Asbury said:
“We respectfully disagree with the CFPB’s conclusions about these historical practices and take very seriously our obligation to comply with applicable law. We are, and have always been, committed to treating our customers fairly and providing them with the information they need to help them make financial decisions that work for their lives. Nonetheless, we believe it is in Atlantic Union’s best interest to settle this matter so we can continue focusing on providing the products, services, and support our customers want.”
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