has been slapped by theConsumer Financial Protection Bureauwith a $10 million fine over allegations of illegal overdraft servicepractices.
According toa July 14 news release, the agency said the bank's telemarketing vendor used deceptivemarketing to enroll customers into its overdraft service called "Account Protector"without these customers' consent. The enforcement action covers the bank's practicesfrom 2010 to 2014.
As part of theenforcement action, the bank is also required to contact all consumers who wereenrolled in Account Protector through the bank's telemarketer, and ask them whetherthey wish to be opted in. Santander Bank is now prohibited from using a vendor totelemarket its overdraft service and must implement a new or revised policy forbetter oversight of third-party telemarketing service providers.
The bank isa unit of Santander Holdings USA Inc.,and Spain-based Banco Santander SAis the ultimate parent of both institutions.
In a separatestatement, Santander Bank said it regrets that "the vendor we hiredto promote our overdraft service may not have followed our instructions and we didnot supervise them as closely as we should have." The bank also stated thatit will be terminating its relationship with the vendor and promised more effectiveoversight of its vendors and processes.