TD Bank Has a Problem with Unauthorized Accounts, Class Action Alleges

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A proposed class action lawsuit accuses TD Bank, N.A. of having a “history and routine practice” of opening accounts in consumers’ names without authorization. 

The 25-page complaint says that although TD Bank assured the public in the wake of the Wells Fargo unauthorized accounts scandal, for which the bank paid billions in fines and settlements, that its practices were “lawful and proper,” recent investigations and reports on TD “tell a different story.” 

According to the suit, unauthorized parties have capitalized on TD Bank’s “loose practices” by using its online banking platform to open fraudulent checking and savings accounts with personally identifiable information stolen from consumers. As the lawsuit tells it, TD accounts can be opened in consumers’ names “in minutes,” with “minimal verification or security procedures.” 

“TD Bank does not make any attempts to reach out to an individual to confirm his or her identity before opening a new account. Under TD Bank’s Online Banking platform, consumers and cybercriminals can open a checking account with only a social security number, a picture of a government-issued ID, and an individual’s personal information.” 

TD Bank’s account-opening security protocols are so lax, the suit says, that unauthorized actors can open an account “with expired phone numbers and expired IDs, and addresses that are no longer current.” The case summarizes that no personal contact, not even a phone call or Zoom meeting, is made by TD to an account applicant before an account is opened. 

In February of this year, residents of the Sandhills area in North Carolina began to receive checks, debit cards, statements and welcome letters from TD Bank, even though they had never opened accounts with the bank and the nearest branch was “100 miles away in South Carolina,” the case says. Per the filing, local authorities determined that more than 1,000 Sandhills residents’ names were used to fraudulently open TD Bank accounts after their identities were stolen. 

Despite the sensitive nature of the personally identifiable information it collects on consumers, TD Bank has “not implemented reasonable cybersecurity safeguards or policies” to protect the data, or trained employees to prevent, detect and stop unauthorized actors from opening fraudulent accounts through the bank’s online platform, the lawsuit says. 

“As a result, TD Bank leaves vulnerabilities in its systems for unauthorized third parties to exploit consumer [personally identifiable information] and commit identity theft,” the suit charges. 

On the flip side, the suit says that closing an account with TD is “much more difficult” given a consumer must visit a branch in person and present identification to shutter an account. 

The lawsuit looks to represent all individuals who had a checking or savings account opened under their identity by TD Bank without their authorization using personally identifiable information via the bank’s online banking platform. 

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