West Virginia officials reached a $13.5 million settlement with Capital One, which allegedly used misleading advertising to attract customers before saddling them with debts.
West Virginia Attorney General Darrell McGraw's office began investigating the card company in 2005, after at least 200 consumers claimed they were struck with hidden fees and issued credit cards with low limits.
Of the settlement, $3 million is debt Capital One agreed to forgive. Another $1 million will go to restitution and consumer education, and $9.5 million will go to the state to "to be used for financial relief for West Virginia consumers," according to a statement from the attorney general's office. As part of the settlement, Capital One denies liability for the credit practices.
"We're pleased to have worked with Attorney General Darrell McGraw to resolve this matter which dates back to a time prior to 2006," Capital One spokesperson Tatiana Stead. "We've since made significant improvements and look forward to continuing to serve our credit card customers in West Virginia."
Added McGraw's office: "This was a hard-fought battle, resulting in a lot of money for the state of West Virginia. Capital One is to be commended for changing the practices that prompted the state's action."
