Capital One to Pay the Price for Deceptive Credit Add-On Marketing Tactics
Capital One Financial Corp. exaggerator has been mandated to pay a sum of $210 million for conducting deceptive marketing of credit card add-ons like credit monitoring and payment protection, reports Bloomberg. Neither a denial nor an admittance of guilt was released by the firm.
The Dodd-Frank Act-created Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency, the primary regulatory of the bank, stated that Capitol One agreed to pay out $140-$150 million to 2 million customers, $25 million to the CFPB and $35 to the OCC.
Capitol One will stop marketing the add-on products pertaining to the case until the CFPB gives its approval for Capital One’s plan to comply with the terms of the settlement, said Kent Markus, assistant director for enforcement at the bureau.
“Today’s action puts $140 million back in the pockets of two million Capital One customers who were pressured or misled into buying credit card products they didn’t understand, didn’t want, or in some cases, couldn’t even use,” said CFPB Director Richard Cordray. “We are putting companies on notice that these deceptive practices are against the law and will not be tolerated.”
He informed reporters during a conference call that any card issuer who employs the same sort of deceptive marketing of these types of products that Capital One did will also face the CFB’s ire. Specifically, the agency is looking out for “violation of law and substantial consumer harm,” he said.
“We know these deceptive marketing tactics for credit card add-on products are not unique to a single institution,” Cordray said. “We expect announcements about other institutions as our ongoing work continues to unfold.”
The bureau will demand refunds be given out to any consumers hurt by such tactics, he said. Doing so is “a priority” for the CFPB.