From Forbes: The controversial Consumer Financial Protection
Bureau announced its first enforcement action today against Capital One Bank. The agency said the credit card company will
pay $210 million in fines to regulators and refunds to customers.
The CFPB said it ordered Capital One Bank to refund
approximately $140 million to two million customers and pay an additional $25
million penalty. Capital One also will pay the Office of the Comptroller of the
Currency a $35 million penalty and refund an additional $10 million to
customers. This is agency’s first ever
enforcement action since being created. The annoucement and fine amount sends a
message to both financial companies wondering about the agency’s power and
politicians who opposed the agency’s existence.
What did Capital One do wrong? The CFPB, which was created
out of the Dodd-Frank Act, said it discovered Capital One was lying to
consumers about the its products. The third-party call centers it had hired
used high-pressure sales tactics to sell consumers add-on features to their
credit cards but misled them about the benefits. The agency says consumers were sometimes led
to believe that the product would improve their credit scores and help them
increase the credit limit on their Capital One credit card…
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