TCF National Bank Tricked Customers TCF Bank, based in the state of Minnesota, has been accused by the Consumer Financial Protection Bureau of deceiving customers across the U.S., fooling them into opting-in to exorbitant overdraft fees.
In fact, TCF National Bank used such aggressive tactics to ensure their customers accepted these fees, that a boat named the “Overdraft,” belonging to the former TCF CEO, was the party place of choice for the bank’s executives. CFPB filed a lawsuit against TCF on President Obama’s last day in office, likening the issue to the Wells Fargo scandal which offered incentives to Wells Fargo employees for such things as opening fake customer accounts.
The lawsuit seeks penalties and compensation on behalf of American consumers; however, TCF denies they tricked their customers. TCF’s overdraft fees three times that of the Banking Industry Average Despite TCF’s denials, CFPB claims the bank executives were extremely happy with the revenues generated from overdraft fees, and that those same executives routinely threw parties to celebrate those revenues on the Overdraft boat.
The bottom line is that TCF’s 66 percent overdraft fee opt-in rate is a whopping three times that of the banking industry average. TCF claims customers were always fully informed with assets topping $21 billion, TCF currently has more than 350 banking branches in the following states: South Dakota, Wisconsin, Arizona, Minnesota, Michigan and Colorado.
TCF maintains that of their more than 2.6 million customers, only a tiny percentage—341 customers—complained about the fees, and that customers were always fully informed of their rights prior to making the opt-in decision. TCF made opt-in seem mandatory the opt-in process was a result of the 2009 rules adopted by Congress (Dodd-Frank) which abolished overdraft fees except when consumers opted-in to overdraft protection.
At that time, TCF was facing a potential loss of as much as $182 million in overdraft fees, and, according to CFPB director Richard Cordray, the bank “trained its employees to use unlawful tactics in their marketing to consumers.” Cordray went on to say that TCF employees made the overdraft opt-in seem mandatory, when, in fact, it was completely voluntary. These same employees “pushed back aggressively” when customers asked questions about the opt-in process, and obscured information regarding the fees when opening new customer accounts.
Incentives for employees who achieved high opt-in rates like the Wells Fargo scandal, TCF bank employees received considerable incentives (up to $7,000 for branch managers who achieved high opt-in rates) to persuade customers to opt-in to $35 overdraft fees. The TCF employees used an “uninformative script” which never actually mentioned specific fees, as well as limited disclosures. The aggressive sales techniques used by Wells Fargo cost the bank as much as $185 million in government fines alone.
Wells Fargo’s CEO also abruptly retired following the scandal. TCF Bank even held monthly meetings to publicly shame those branch managers who were not meeting their opt-in quotas, and many of the employees felt their continuing employment hinged on meeting the quotas. TCF called their quotas a “modest incentive program,” claiming it was only in place for less than a year.
TCF also claims that the number of customers who choose opt-in when opening an online account is roughly the same as for those who open an account in person. CFPB says TCF instructed their staff not to “over explain” the terms and conditions related to the opt-in program, and that if a new or existing customer questioned the opt-in practices, the staff were to suggest a hypothetical situation in which the customer would desperately need access to money.
How Our Philadelphia Consumer Protection Lawyers Can Help
If you feel you were tricked into opting-in to TCF Bank’s overdraft fees, it could be beneficial to consult an attorney who can help you determine your best course of action. The national consumer protection lawyers at Golomb Legal have successfully represented individuals in Philadelphia, Pennsylvania, New Jersey, and throughout the United States.
Contact us to learn more about your legal options or to schedule a free consultation call the Philadelphia consumer protection lawyers at Golomb Legal today at 1-800-355-3300 or 1-215-985-9177 or fill out our confidential contact form.