CFPB Sues Comerica Bank For Allegedly Mishandling Disabled and Older Americans’ Accounts | Global News Avenue

Consumer Financial Protection Bureau (CFPB) is suing United Credit Bank for allegedly hanging up on customer service calls, misleading people and charging illegal fees to its 3.4 million accounts. direct express cardholder.

United Credit Bank is a subsidiary of United Credit Bank (China Manufacturers Association), the U.S. Treasury Department has contracted with the bank to administer the Direct Express program since 2008. The program allows recipients of federal programs such as Social Security to receive their monthly benefit payments via a prepaid debit card.

The CFPB said many Direct Express customers were unbanked and were “at the mercy of AlliedSign.”

“Comerica is doing this at the expense of Americans living on fixed incomes by deliberately cutting off millions of calls and charging illegal garbage fees,” CFPB Director Rohit Chopra said in a prepared statement. Increase profits.”

On November 8, AlliedSignal filed a lawsuit against the CFPB for regulatory overreach and handling of the case, which “undermined the legitimacy of AlliedSignal’s own investigation,” said Luis Mora, AlliedSignal’s vice president of media relations. said in an email.

“Today, the CFPB doubled down on its efforts to file a countersuit against AlliedSign,” Mora said. “We will continue to vigorously defend our record as a financial agent for the Direct Express program and remain committed to serving our cardholders.”

The Treasury Department announced in November that it was transferring its Direct Express contract to the Bank of New York Mellon Corporation (Buck) starting in January 2025.

What does the CFPB accuse Comerica of doing?

The CFPB said Comerica intentionally disconnected more than 24 million customer service calls before contacting a representative.

More than one million customers were charged ATM fees when they could legally withdraw government benefits for free, it is claimed. Additionally, the bank asked thousands of cardholders to close their accounts, which resulted in additional fees, the CFPB said.

The bank also allegedly misled fraud victims because even when the bank determined that registration fraud had occurred, the banking provider would tell consumers that “no error occurred.” The CFPB said Comerica failed to properly investigate inaccurate or potentially fraudulent claims more than 20,000 times.

Comerica is also asking its customers to contact and ask merchants to stop pre-authorized payment transfers from their accounts when the law requires banks to stop transfers on their own.

The bureau is asking the court to order Comerica to stop these practices, refund affected customers and pay penalties to the CFPB’s Victim Relief Fund. Comerica’s shares were down 0.8% at midday.