Over the last few years, the world of banking has had its fair share of controversies. Allegations against the Wells Fargo & Company continue to surface. Red flags went up when some clients started to notice unanticipated fees, credit and debit cards and lines of credit. Investigations uncovered that employees were creating fraudulent savings and checking accounts on behalf of the bank.
On the other hand, Minnesota-based TCF National Bank recently agreed to a $30 million settlement after the Consumer Financial Protection Bureau filed a lawsuit in 2017. What was the reason? The banks encouraged employees to sign customers up for overdraft programs. Customers apparently had the choice to opt out of the program. However, they did not advertise that option. The company was criticized for obscuring information.
TCF Bank earlier stated that they complied with all laws and regulations. So, why did they pay the price?
Obscuring information goes against a consumer’s rights
State consumer protection laws protect individuals from abusive business practices. Hiding information about programs, campaigns or accounts goes against a consumer’s right to understand and choose what services they receive.
Businesses, large and small, need to be aware of unlawful tactics. Misleading customers or tricking them into consent can result in major legal repercussions. That’s why business owners are usually held accountable for lack of information, especially when someone is purchasing their goods or services.
For business owners, it’s important to avoid deceptive advertising, pricing and offers. Train employees to present accurate information and avoid giving out incentives that might not benefit the customer.