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,
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 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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