Intro: "A US regulator has fined the credit card provider Capital One Financial for misleading millions of customers into buying unnecessary products."
Capital One has agreed to pay $210m to settle the case and refund two million customers. (photo: unknown)
Capital One Fined for Misleading Millions of Customers
20 July 12
US regulator has fined the credit card provider Capital One Financial for misleading millions of customers into buying unnecessary products.
Capital One has agreed to pay $210m (£134m) to settle the case and refund two million customers.
The Consumer Financial Protection Bureau (CFPB) said "deceptive marketing tactics" had been used.
Consumers had to pay for extras such as payment protection and credit monitoring when they took out a card.
CFPB director Richard Cordray said: "Customers were pressured or misled into buying credit card products they didn't understand, didn't want, or in some cases, couldn't even use."
"We are putting companies on notice that these deceptive practices are against the law and will not be tolerated," he added.
Capital One, one of the US's biggest issuers of credit cards, said it will refund customers $150m, pay a $25m fine to the CFPB and an additional $35m to the Office of the Comptroller of the Currency.
AccountableRyan Schneider, president of Capital One's card business said agents were responsible, but that the company would take responsibility for their actions: "We are accountable for the actions that vendors take on our behalf."
"These marketing calls were inconsistent with the explicit instructions we provided to agents for how these products should be sold. We apologize to those customers who were impacted and we are committed to making it right," he said in a statement.
The CFPB action is the regulator's first enforcement action since it began operating last year in the wake of the US subprime crisis.
The case against Capital One comes amid simmering public anger against banks' improper lending practices.
Last month British bank Barclays was fined for trying to rig the key Libor rate, which underpins trillions of financial contracts worldwide, including some mortgages in the US.
Rival global bank HSBC also faces a fine for improper behaviour which included money laundering for Mexican drug barons.
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And a young black, caught for the first time with a grain or two or crack cocaine, will be admonished by the judge and then set free.
And pigs will fly.
Well, at least I got the last one right: 1 % pigs not only fly, they fly on private luxury aircraft owned by corporations "too poor" to pay any taxes.
Reported in the US a little...but really not mentioned is that this is the first action of the newly created Elizabeth Warrens idea..consumer protection bureau....
most national media completely missing that, if they mention it at all in the US.
Kudos to Ms Warren and though great be her mind and efforts resulting.....i s about.tied in the polls for a senate seat.....with a sycophant of the right......mind s of jello... we, the US..wobble on...... to the cliff.
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