The Consumer Financial Protection Bureau took its first enforcement action on Wednesday. Capital One entered into a consent order to "refund approximately $140 million to customers and pay a $25 million penalty," according to the agency's press release.
At issue was a number of credit card add-on products, such as debt forgiveness plans and payment. "The CFPB alleged that Capital One consumers were misled about the nature of the products, as well as their costs and potential benefits. In some cases, according to the agency, customers were also enrolled without their consent," explains American Banker's Kevin Wack.
"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," said Ryan Schneider, president of Capital One's card business, in a statement.
The OCC, the bank's primary regulator, joined the CFPB in the enforcement action. "This announcement demonstrates interagency cooperation at its best," said Comptroller of the Currency Thomas Curry.
"Today's action puts $140 million back in the pockets of two million Capital One customers who were pressured or misled into buying credit card products they didn't understand, didn't want, and in some cases, couldn't even use," said CFPB director Richard Cordray.
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