Tuesday, July 24, 2012

Capital One: Guess what's on your credit card statement?

Last week, the Consumer Financial Protection Bureau announced its first public enforcement action: an order requiring Capital One Bank to refund approximately $140 million to 2 million customers who were pressured or mislead into paying for “add-on” products such as payment protection and credit monitoring when activating their Capital One credit cards.

CFPB is the bureau of the federal government that’s tasked with protecting consumers by carrying out consumer financial laws, so that people are able to make financial decisions in their own best interests while knowing they are protected from unfair, deceptive, or abusive practices -- whether they are applying for a mortgage, choosing among credit cards, or using a bank account. 

CFPB was established as part of the Wall Street reforms President Obama signed into law two years ago.

The recent enforcement action is the result of a CFPB examination that discovered Capital One’s call-center vendors engaged in deceptive tactics to sell the company’s credit card add-on products. In some cases, consumers were led to believe that the product would improve their credit scores and help them increase the credit limit on their Capital One credit card. 

In other instances, consumers were not told that buying the products was optional, or were sold products they were ineligible to take advantage of.

This is another example of the differences between Democrats and Republicans. Republicans have tried to stop consumer protection law for years. 

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