SoFi’s brokerage unit will pay a $1.1 million fine to the Financial Industry Regulatory Authority (FINRA) for fraud detection weaknesses that allowed thieves to create SoFi Money accounts using fake or stolen identities.

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SoFi Securities failed to establish and maintain reasonable customer identification and identity theft programs for SoFi Money, its cash management brokerage account that also contained features like a debit card and check writing capabilities, FINRA said in an order released Thursday.

SoFi used a largely automated process to verify customers’ identities and approve the opening of SoFi Money accounts, a system that was vulnerable to fraud, FINRA said. Among the alleged problems was that SoFi failed to prevent former customers whose loan or investment accounts had been closed for potential fraud from opening accounts.

The details: From December 2018 to April 2019, fraudsters created approximately 800 SoFi Money accounts with fake or stolen identities, then used those accounts to transfer $8.6 million from customers at other financial institutions without their consent. Approximately $2.5 million of those funds were withdrawn by the fraudsters from these accounts, FINRA said.

In addition to the vulnerabilities in its customer identification processes, SoFi failed to develop and implement a written identity theft prevention program, FINRA said.

Compliance considerations: In April 2019, SoFi increased its staff trained to review fraud alerts, implemented improvements to its customer identification and identity theft programs, and changed its customer verification system to decline certain applicants. It hired a third party to review a large number of fraud alerts being generated by its upgrade systems, FINRA said.

Company response: In an emailed response, a SoFi spokesperson said, “We are pleased to have resolved this matter, which relates to events in 2018-2019.”