The Consumer Financial Protection Bureau yesterday announced an enforcement action against Atlantic Union Bank regarding the institution’s procedures for enrolling customers in overdraft protection products in violation of the Electronic Funds Transfer Act, assessing a fine of $1.2 million and requiring the company to refund consumers $5 million.
The Details: Under the EFTA, banks are required to describe their overdraft services to customers in writing before asking consumers to opt in to the coverage for ATM withdrawals and one-time debit card transactions.
- Instead of doing it that way, the bank instead gave consumers oral descriptions of its overdraft coverage and then provided them with the required written disclosures.
- For consumers who enrolled in overdraft coverage over the phone, the bank’s employees were accused of not clearly explaining which transactions were covered by the service and making misleading statements about the product’s terms and conditions.
The Action: Finding that the bank violated the EFTA and engaged in deceptive acts or practices under the Consumer Financial Protection Act, the CFPB ordered the bank to pay affected consumers $5 million in illegally charged fees and pay a fine of $1.2 million.
- The bank was found to have charged 8,500 customers whose accounts were opened using the aforementioned process.