TD Bank agreed to a settlement with the Consumer Financial Protection Bureau over the sale of its optional overdraft service, Debit Card Advance or DCA. TD Bank operates about 1,250 locations, primarily across the East Coast.
The CFPB found that TD Bank charged consumers overdraft fees for ATM and one-time debit card transactions without obtaining their consent. It also found that when presenting DCA to new customers, TD Bank deceptively claimed DCA was a “free” service or that it was a “feature” that “comes with” new consumer-checking accounts.
However, TD Bank charges customers $35 for each overdraft transaction paid through DCA, and DCA is an optional service that doesn’t come with a consumer-checking account.
In addition to failing to get customers’ consent for DCA, TD Bank also required new customers to sign its overdraft notice with the “enrolled” option pre-checked without mentioning the DCA service, according to the CFPB. The bank also hid the overdraft notice to prevent a new customer’s review of their pre-marked “enrolled” status in DCA.
In addition to paying restitution and the fine, the consent order requires TD Bank to correct its DCA enrollment practices and stop using pre-marked overdraft notices.