More than 420,000 U.S. Bank customers have refunds coming their way for identity protection and credit monitoring services they paid for but didn’t receive.
According to the Consumer Financial Protection Bureau, the Minneapolis-based bank agreed to pay back $48 million to customers who were unfairly billed for Privacy Guard and Identity Secure services between 2004 and 2012. The CFPB has taken action against other big banks for similar offenses.
“These services were sold as ‘add-on products’ for credit cards and other bank products such as mortgage loans and checking accounts,” the CFPB said.
The CFPB said many consumers were billed for the products before U.S. Bank obtained written authorization to perform the service, which is required. Consumers thought they were receiving the identity theft and fraud protection services when in reality they were not receiving all, if any, of them.
According to CNN Money, U.S. Bank hired third-party vendor Affinion to sell, bill for and provide the protection programs but broke off its relationship with the firm about two years ago when it became aware of the problems.
U.S. Bank must also pay a $5 million penalty to the CFPB and a $4 million penalty to the Office of the Comptroller of the Currency.
CFPB director Richard Cordray said in a statement:
Today’s action will provide $48 million in relief to U.S. Bank customers who were illegally charged for identity protection services they did not receive. We have consistently warned companies about practices related to add-on products and we will do what is necessary to prevent further harm to consumers.
The customers will receive the refund as a credit to their bank account or a check in the mail.