The Office of the Comptroller of the Currency announced a formal enforcement agreement Thursday with Capital One Bank for unfair credit card closing practices between 2004 and 2006.

The enforcement order said that, from Jan. 1, 2004, until Oct. 31, 2006, the subsidiary of Capital One Financial Corp. assessed annual membership fees on accounts with no outstanding balances and after customers had asked to close the accounts. As part of the agreement, the OCC ordered the company to reimburse $775,000 to customers who were unfairly assessed despite having no credit balance or having paid off their accounts within 90 days after asking they be closed.

The bank must also appoint a committee to monitor compliance with the agreement and submit progress reports to regulators. Capital One was a state member bank at the time but became a national bank in March 2008. The allegedly unfair actions were brought to the OCC's attention by the California and West Virginia attorneys general.

In a statement, Capital One said the "problem was the result of a systems issue that we fixed in 2006."

"At the time, we refunded membership fees for many customers who contacted us directly, but in retrospect we should have done so for an additional 3,400 customers as well," it said. "We sincerely regret this error. As part of the resolution to this issue, we are going beyond the legal requirements and refunding membership fees for an additional 15,000 customers who paid off their balances in full within 90 days of requesting their accounts be closed."

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