Scam of the day – September 30, 2014 – U.S. Bancorp fined and ordered to pay customers millions

Headlines last week trumpeted the fining by the Consumer Financial Protection Bureau of U.S. Bancorp 9 million dollars.  U.S. Bancorp was also ordered to return 48 million dollars to customers for illegal billing practices regarding its identity theft products.  The Consumer Financial Protection Bureau (CFPB) alleged that U.S. Bancorp charged its customers for credit monitoring services, but that the customers often did not receive the services promised and paid for.  Before you start judging U.S. Bancorp too harshly, however, it is important to note that the credit monitoring program of the bank was provided by a third party contractor, Affinion Group, which had previously run into similar problems with Capital One and Bank of America.  According to Affinion, this problem was not one of intentionally trying to cheat consumers, but more a matter of customers not being sufficiently told that they would need to submit more detailed information in order to fully activate the credit monitoring services, leaving the customers assuming that they were covered, when in fact, they were not.  Affinion says it has corrected this communications failure by now requiring authorizations for immediate access to credit reports for credit monitoring when customers initially enroll in their programs.  However, this change does not alter the fact that many customers were cahrged for services they either did not agree to or just did not receive.  In some cases the interest payments and fees from these programs resulted in customers going over their credit limit and being subject to bank penalties.  For its part, U.S. Bancorp has agree along with paying the fine to better monitor the third party vendors it uses.

TIPS

If you were directly affected by this, you should contact your local U.S. Bancorp branch.  For the rest of us, the first lesson is to make sure that you fully understand the details of any contract you sign up for.  Specifically as to credit monitoring services, you should make sure you understand what you need to do to activate the services and precisely what services are provided and at what cost.  Remember, credit monitoring services do nothing to actually prevent identity theft; they only help you become aware of the crime earlier.  It is also important to note that no credit monitoring service does anything for you that you cannot do for yourself at much less cost and often free.  For more details as to what you can do to protect yourself from identity theft, I suggest you get a copy of my new book “Identity Theft Alert.”  You can order it from Amazon merely by clicking on the link on the right hand side of this page.