US Regulator fines Santander $10million to settle vendor’s overdraft practices

13th July 2016

Santander Bank has today been told to fork out a $10m (£7.5m) fine after one of its vendors signed customers up to overdraft services without their consent.

In addition to enrolling customers without their go-ahead, the Consumer Financial Protection Bureau (CFPB) said the bank’s telemarketer misled customers into thinking the service offered was free, when it actually cost $35 per overdraft, and falsely claimed that its calls regarding the service were not a sales pitch.

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

As well as forking out the fine, Santander has been ordered to give the customers concerned the chance to confirm they want the overdraft service and improve the way it oversees the telemarketing vendors it uses.

A Santander spokesperson said: “Santander Bank is committed to always treating our customers fairly and ensuring our vendors do too. 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.

“These actions, which occurred several years ago, do not reflect our values and fell short of the high expectations we have for ourselves and our vendors.”

Source: Cityam