The US Department of Justice has filed a civil lawsuit against Suntrust Bank alleging that it violated a consumer protection law when it refused to process payments on personal loans in the city of Dallas.
The complaint, filed in US District Court in Dallas on Monday, says that Suntrust failed to verify the identity of a borrower in connection with a personal loans loan and then failed to process payment.
The complaint also alleges that SunTrust failed to comply with federal anti-money laundering rules.
The DOJ claims that the failure to process personal loans is the result of Suntrust’s failure to adequately review and verify the borrowers’ identities, and that Sun Trust’s failure resulted in a “fraudulent and/or fraudulent transaction.”
The complaint says that the personal loans were made out to people in Dallas who lived in a single-family home, but that the bank did not verify the identities of the borrowers and did not take steps to identify the owner of the property.
The bank has also been accused of violating a number of consumer protection laws, including the Fair Debt Collection Practices Act (FDCPA) and the Truth in Lending Act.
The department also claims that Suntoys failure to verify identity led to a “significant” loss of financial privacy.
It alleges that the loans were issued to individuals whose identities had been compromised.
Suntrust said that the lawsuit is not based on the existence of any evidence that a borrower was compromised, but rather that SunToys failure resulted from a combination of “unaware and/ or inadvertent” mistakes and the bank’s failure not to verify identities.