Santander Bank Fined $10 Million for Illegal Overdraft Practices

santander-bankThe Consumer Financial Protection Bureau (CFPB) ordered Santander Bank, N.A. to pay a $10 million fine for illegal marketing of overdraft services and using a telemarketing firm that signed some bank customers for the overdraft service without their consent.

According to CFPB Director Richard Cordray “Santander tricked consumers into signing up for an overdraft service they didn’t want and charged them fees.  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.

Why are these actions illegal?

Since 2010, federal rules have prohibited banks and credit unions from charging overdraft fees on ATM and one-time debit card transactions unless consumers specifically agreed. If consumers don’t agree, the banks may decline the transactions because of insufficient or unavailable funds, and cannot charge an overdraft fee.

The Bureau found Santander Bank’s illegal and improper practices included:

  • Signing consumers up for overdraft service without their consent.
  • Deceiving consumers that overdraft service was free.
  • Deceiving  consumers about the fees they would face if they did not opt in.
  • Falsely claiming the call was not a sales pitch.
  • Failing to stop its telemarketer’s deceptive tactics.

Enforcement Action – So what has CFPB ordered Santander Bank to do?

  • Validate all opt-ins associated with the telemarketer.
  • Not use a vendor to telemarket overdraft service.
  • Increase oversight of all third-party telemarketers.
  • Pay a $10 million penalty.

The full text of the CFPB’s consent order.

The purpose of the Consumer Financial Protection Bureau.  The CFPB is “a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.”  For more information, visit

Youtube from CFPB