Capital One to Pay $210M for Deceit
Capital One to Pay $210M for Deceit
Capital One Bank is charged to pay 210 million dollars for the costs and compensation for the settlement of the deceptive credit card practices it has been involved in. The penalty for this giant company was imposed by the Consumer Financial Protection Bureau.
According to the Washington Post, McLean, the manager of the bank that is based on Virginia should repay the customers who availed the credit monitoring and add-on services that they charged. The bank allegedly hired a third party to prey on clients who were jobless and were suffering from bad credit. The callers from the bank would tell the customers that the services were free or compulsory. Some of them were even promised that their credit scores will boost when they apply for the service and that is not all; they were also told that it will grant them debt forgiveness when they have illnesses. Some of the customers were enrolled in the deal even without their knowledge, and they were fined for it.
This case is the first ever that the CFPB or the Consumer Financial Protection Bureau is handling and investigating since its creation in 2011. Republican lawmakers are opposed to its establishment and have been trying to shut it down for two years. However, in its two year operation, the CFPB is stronger than ever and now it is going after Capital One.
According to the CFPB director, Richard Cordray, the agency is going to make sure that the companies that are practicing deceptive acts contrary to law will not be tolerated and they will make sure that they will pay for their insolence. Breach
Ryan Schneider took responsibility for the illegal activities that their bank has done. As the credit card division president he admitted that they are liable for the work that their employees have done for them. The bank will be paying $25 million worth of damages to CFPB, another $35 million will be paid to the Office of the Comptroller of the Currency and they will be reimbursing $150 million worth of cash to over 2.5 million of their clients who had availed the service from August 2010 and January 2012.
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Filed under: Credit • credit cards • Credit Score
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