PhotoSantander Bank will pay a $10 million fine for illegal overdraft service practices, the Consumer Financial Protection Bureau (CFPB) has ordered. The agency said Santander's telemarketing vendor deceptively marketed the overdraft service and signed some customers up without their consent.

“Santander tricked consumers into signing up for an overdraft service they didn’t want and charged them fees,” said CFPB Director Richard Cordray. “Santander’s telemarketer used deceptive sales pitches to mislead customers into enrolling in overdraft service. We will put a stop to any such unlawful practices that harm consumers.”

This could be why consumers like Alex of Huntingdon Valley, Pa., say they were charged for a service they don't remember signing up for.

"They said I apparently walked in the bank and requested a form to be opted in. I do not recall this. Now they can't even find the option in form that I apparently requested and signed," Alex said in a ConsumerAffairs review. "They charged me a bunch of overdraft fees. Manager is a totally floozy. Won't even call me back. Horrible customer service. Or can you even call it customer service?"

In addition to paying the civil money penalty to the CFPB, Santander Bank must go back and give consumers the opportunity to provide their consent to overdraft service, not use a vendor to telemarket its overdraft service, and it must increase oversight of vendors it uses to telemarket other consumer financial products or services, according to a consent order.

Santander, based in Wilmington, Del., operates a network of nearly 700 retail branch offices in Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, and Rhode Island.

"Account Protector"

Santander Consumer USA July 14, 2016, 5:17 p.m.
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From 2010 to 2014, Santander marketed and enrolled consumers in its “Account Protector” overdraft service for ATM and one-time debit card transactions, and charged consumers $35 per overdraft. Santander used a telemarketer to call consumers to persuade them to opt in to the overdraft service and rewarded the telemarketer with a higher hourly rate when it hit specified sales targets, the CFPB said.

In 2010, federal rules took effect prohibiting banks and credit unions from charging overdraft fees on ATM and one-time debit card transactions unless consumers affirmatively opt in. If consumers don’t opt in, banks may decline the transactions because of insufficient or unavailable funds, and can’t charge an overdraft fee.

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