The CFPB has brought its first enforcement motion against Capital One. The CFPB Capital One case has been fixed, as the bank unsuccessful to watch third-party services being sold with its cards, resulting in more than $200 million in fines and restitution.
First fix from CFPB
The Consumer Financial Protection Bureau, in spite of its controversial beginnings and controversial appointment of a director, hasn't really done much in the way of enforcement, besides proposing some rules and so forth, at least until now.
When the Consumer Financial Protection Bureau found that Capital One, a credit card issuer, was not very clear about who was selling what with its third-party vendors who were selling financial products to go with the cards. That was why the Consumer Financial Protection Bureau started the investigation and then the suit. The Wall Street Journal announced that the agency has finished enforcing its first action against the business.
Distributors targeted poor charge card holders
There are other services that can be acquired through third party vendors to go with Capital One Charge cards, according to ABC. One of them, payment protection, will make a minimum payment on behalf of somebody who is sick or injured and cannot make it to work. It is a kind of insurance against missing a payment. The other service offered is credit monitoring.
If a customer called the call center to activate a card and had poor credit, it took at least 8 minutes to get through the call while listening to a lot of sales pitches from operators who would over exaggerate the service a ton. There was a lot of pressure in those phone calls to get the additional things. The typical consumer would only be on the phone for 2 minutes and did not have to listen to any sales pitches.
Phone operators promised things like purchasing the product would improve credit scores, or that customers who were already jobless could get a few payments made for them from payment protection, which needs the policy holder to be employed.
Capital One fees
Capital One has to pay $210 million in in fees because it lost the ability to regulate what was being sold and the way it was being sold with the 3rd party vendors. The bank has to stop selling Ancillary charge card goods until it can find ways to regulate the products better. $150 million of the fee will be given to Capital One clients who were deceived, $35 million will go to the Office of the comptroller of the Currency, and $25 million will be paid to the CFPB.
According to USA Today, the 2.5 million customers wronged in the case will receive their money later this year. It is the second time Capital One has faced such charges, as the bank resolved a similar case in England in 1997, according to ABC. Discover Financial is said to be currently facing a similar CFPB investigation.
First fix from CFPB
The Consumer Financial Protection Bureau, in spite of its controversial beginnings and controversial appointment of a director, hasn't really done much in the way of enforcement, besides proposing some rules and so forth, at least until now.
When the Consumer Financial Protection Bureau found that Capital One, a credit card issuer, was not very clear about who was selling what with its third-party vendors who were selling financial products to go with the cards. That was why the Consumer Financial Protection Bureau started the investigation and then the suit. The Wall Street Journal announced that the agency has finished enforcing its first action against the business.
Distributors targeted poor charge card holders
There are other services that can be acquired through third party vendors to go with Capital One Charge cards, according to ABC. One of them, payment protection, will make a minimum payment on behalf of somebody who is sick or injured and cannot make it to work. It is a kind of insurance against missing a payment. The other service offered is credit monitoring.
If a customer called the call center to activate a card and had poor credit, it took at least 8 minutes to get through the call while listening to a lot of sales pitches from operators who would over exaggerate the service a ton. There was a lot of pressure in those phone calls to get the additional things. The typical consumer would only be on the phone for 2 minutes and did not have to listen to any sales pitches.
Phone operators promised things like purchasing the product would improve credit scores, or that customers who were already jobless could get a few payments made for them from payment protection, which needs the policy holder to be employed.
Capital One fees
Capital One has to pay $210 million in in fees because it lost the ability to regulate what was being sold and the way it was being sold with the 3rd party vendors. The bank has to stop selling Ancillary charge card goods until it can find ways to regulate the products better. $150 million of the fee will be given to Capital One clients who were deceived, $35 million will go to the Office of the comptroller of the Currency, and $25 million will be paid to the CFPB.
According to USA Today, the 2.5 million customers wronged in the case will receive their money later this year. It is the second time Capital One has faced such charges, as the bank resolved a similar case in England in 1997, according to ABC. Discover Financial is said to be currently facing a similar CFPB investigation.
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