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Capital One has been ordered to pay $210 million to settle allegations it tricked credit card customers into buying unwanted “add-on” products such as payment protection and credit monitoring. Nearly 2 million customers will share a portion of the Capital One credit card settlement, amounting to about $70 apiece. The announcement comes on the heels of a $10.5 million class action lawsuit settlement and $2 million State of Minnesota settlement with Discover Financial Services for the same charges: deceptive marketing of fee-based products.
The Capital One credit card product settlement was the first public enforcement case brought by the federal government’s new Consumer Financial Protection Bureau, established by the Dodd-Frank Act to increase oversight of consumer financial products. The agency said Capital One customers were wrongly led to believe by call center workers that they needed to buy the add-on services to activate their cards or that debt protection or credit monitoring was free. Other customers were left with the impression that their credit scores would improve with the purchase, while some got billed even though they weren’t eligible.
The bulk of the settlement will go to consumers, with $60 million going toward penalties, $25 million to the CFPB, and $35 million the Office of the Comptroller of the Currency.
“Today’s action puts $140 million back in the pockets of 2 million Capital One customers who were pressured or misled into buying credit card products they didn’t understand, didn’t want, or in some cases, couldn’t even use,” said CFPB Director Richard Cordray. “We are putting companies on notice that these deceptive practices are against the law and will not be tolerated.”
Cordray said the CFPB will seek restitution for injured consumers in future enforcement actions, including against Discover Financial Services, which reached a class action lawsuit settlement this year to settle charges it deceptively marketed fee-based products, including debt protection and credit monitoring. The CFPB said it has already subpoenaed Discover.
“We know these deceptive marketing tactics for credit card add-on products are not unique to a single institution,” Cordray said. “We expect announcements about other institutions as our ongoing work continues to unfold.”
Capital One apologized for the deceptive credit card marketing tactics and blamed it on third-party vendors.
“Capital One’s third-party vendors did not always adhere to company sales scripts and sales policies for payment protection and credit-monitoring products, and the bank did not adequately monitor their activities,” the bank said in a statement.
Refunds from the Capital One credit card settlement will be automatically credited to customer accounts if they’re eligible. Eligible customers who no longer have a Capital One account will have a check mailed to them. Refunds are expected to be handed out later this year. Customers are urged to watch out for spammers claiming they will get them a refund. More information can be found in this post from the CFPB.
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41 thoughts onCapital One to Pay $210M Credit Card Settlement
42,000,00 They got me,pay til I die.Part of our governments great realationship with the banks,were forced to bail them out,they turn around and screw us,when they signed the fair credit lending bill in 2009 that the banking industry wrote,what a
government
could you please mail me out a claim form for the capitol one class action settlement. mail claim form to gregorycporter 1160raymondstreet memphis,tn38114 or call me at 901-7363417 or 901-907-8678.
Be very careful what you say AND how you say it to these people. They record EVERYTHING you say! If you tell them “never call me again!”
They won’t and while this is great for a little while. They will still keep charging you all of those lovely late fees, over the limit fees, etc. Only now you won’t have a clue what they’re doing because they won’t call. And depending on how you worded you comment to them, you may no longer even get a bill.
Which is what happened to me after 7 calls before noon. My calls, like yours, started quite early around 6 am. I finally snapped & told the annoying rep on the phone ” Do No Call Me, Do Not Write to Me, Do No Contact Me EVER AGAIN!”
And they didn’t. I had to call them to find out what my current balance was. And when I asked them why they didn’t send me one, they said. “Well, once you tell us Not to contact you. We legally cannot contact you. Unless you contact us and tell us differently.”
Which honestly is just a little too convenient. But I did want to give you a warning.
Good Luck.
Tracey
my story seems the same as a lot here i make payments using the chek box on thier web site for the minimum payment then they charge me late fee and not paying the minimum by 16 cents 500 dollar limit card spiraled to over 1200 then 2000 in collections ..when will someone do something about this scam company???
Please add me to this lawsuit
please add me to this lawsuit also
What is the bottom-line on this lawsuit.
I am now in collections with capitol one because I refused to pay the fines and increased rates after the fraudulent ‘payment protection’ which they sold me for an extra $10/month did not actually protect me from anything. I’m researching now if this Class Action applies to me. I did receive information in the mail over 2 yrs ago but it basically just said ‘stay posted.’ Does anyone know how I can find out more?
I have been trying to pay this off for 4 years. I had protection but when my husband turned ill and I had to miss work, my protection didn’t ” apply “, when I was very ill, it still didn’t. explain what the protection plan is please. I have been paying 10.00 a month since and getting no-where.
I am part of this i had a capital one credit card and paid it in full and they sid that i never made payments and charged me high interest rates. I can prove i paid them. I have not gotten any documents about this settlement and they have been calling me non stop and then when speaking to them they hang up.