Last week, the Consumer Financial Protection Bureau announced its first public enforcement action:
an order requiring Capital One Bank to refund approximately $140
million to 2 million customers who were pressured or mislead into paying
for “add-on” products such as payment protection and credit monitoring
when activating their Capital One credit cards.
CFPB was established as part of the Wall Street reforms President Obama signed into law two years ago.
The recent enforcement action is the result of a CFPB examination that discovered Capital One’s call-center vendors engaged in deceptive tactics to sell the company’s credit card add-on products. In some cases, consumers were led to believe that the product would improve their credit scores and help them increase the credit limit on their Capital One credit card. In other instances, consumers were not told that buying the products was optional, or were sold products they were ineligible to take advantage of.
To make sure that all affected consumers are repaid and that consumers are no longer subject to these misleading and high-pressure tactics, Capital One has agreed to end its deceptive marketing practices, pay a $25 million penalty, and complete repayment -- plus interest -- to two million consumers. Under the terms of the agreement:
CFPB was established as part of the Wall Street reforms President Obama signed into law two years ago.
The recent enforcement action is the result of a CFPB examination that discovered Capital One’s call-center vendors engaged in deceptive tactics to sell the company’s credit card add-on products. In some cases, consumers were led to believe that the product would improve their credit scores and help them increase the credit limit on their Capital One credit card. In other instances, consumers were not told that buying the products was optional, or were sold products they were ineligible to take advantage of.
To make sure that all affected consumers are repaid and that consumers are no longer subject to these misleading and high-pressure tactics, Capital One has agreed to end its deceptive marketing practices, pay a $25 million penalty, and complete repayment -- plus interest -- to two million consumers. Under the terms of the agreement:
- Capital One will pay approximately $140 million to all of the consumers who either initially enrolled in a product on or after August 1, 2010, or who tried to cancel a product on or after August 1, 2010, but were persuaded to keep the product after speaking with a call center representative.
- In addition to the amount paid for the product, cardmembers will receive a refund of the associated finance charges, any over-the-limit fees resulting from the charge for the product, and interest.
- If the consumers are still Capital One customers, they will receive a credit to their accounts. If they are no longer a Capital One credit card holder, they will receive a check in the mail. Consumers are not required to take any action to receive their credit or check
No comments:
Post a Comment
write your comments here.....