Capital One Reaches $210M Settlement of Deceptive Marketing Claims

WASHINGTON, D.C. - (Mealey's) Capital One Financial Corp. on July 18 reached a $210 million settlement with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) over its allegedly deceptive credit card marketing, according to documents filed with both agencies (No. 2012-CFPB-0001, CFPB; No. 2012-152, OCC).

The settlement marks the first enforcement action by the CFPB, which was formed July 21, 2011, with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

According to a pair of consent decrees with the CFPB and the OCC, Capital One has agreed to reimburse up to 2.5 million customers a total of $150 million for the allegedly deceptive marketing of its "add-ons" to credit cards as well as its allegedly unfair billing practices.  Capital One also agreed to pay a $25 million fine to the CFPB and a $35 million fine to the OCC.

Compliance Bulletin

The allegedly deceptive practices occurred between August 2010 and January 2012 at call centers that Capital One contracted with to market its credit cards, according to the agencies.  The add-ons at issue that Capital One sold to its credit card customers include payment protection and credit monitoring.

The CFPB also issued a related compliance bulletin, outlining its expectations for credit card issuers' marketing of add-on products moving forward.

"The CFPB will continue to closely review the operations of the credit card issuers and service providers that it supervises with respect to add-on products, and to assess whether additional supervisory, enforcement, or other actions may be necessary to ensure that the market for add-on products functions in a fair, transparent, and competitive manner," the CFPB said in the compliance bulletin.

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