Capitol One Bank has earned the distinction of being the first bank penalized by the new Consumer Financial Protection Bureau
(CFPB), which discovered the financial institution had duped millions of customers into buying products they didn’t need.
For using “deceptive marketing tactics,” Capitol One must refund $140 million to two million of its customers. The CFPB also ordered
the bank to pay a $25 million penalty.
Among Capitol One’s misdoings, the bank told customers that buying add-on products, such as payment protection and credit monitoring, would improve their credit scores and help them increase the credit limit on their credit cards.
Also, the bank neglected to tell some consumers that buying the products was optional. Others experienced difficulties trying to cancel the extras.
In addition to paying the $165 million ordered by the CFPB, Capitol One was ordered by the Office of the Comptroller of the Currency
(OCC) to pay another $10 million in refunds to customers. The OCC, which regulates banks, levied its own fine of $35 million, bringing the combined total to $210 million that Capitol One will fork over.
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