The Consumer Financial Protection Bureau has finally finished its first regulatory probe. The investigation was conducted into credit card-related products sold by distributors employed by Capital One, in an unlawful manner. The CFPB Capital One case has led to the bank having to pay more than $200 million in penalties and restitution.
Consumer Financial Protection Bureau, Capital One resolve first enforcement by agency
The Consumer Financial Protection Bureau, regardless of its controversial beginnings and controversial appointment of a director, hasn't really done much in the way of enforcement, besides proposing some rules and so forth, at least until now.
The bureau has brought and also finished its first enforcement action, according to the Wall Street Journal, against credit card company Capital One. The CFPB Capital One case stemmed from third-party vendors who were selling financial goods to go with Capital One's charge cards, like credit protection and payment protection. Capital One was subject of a Consumer Financial Protection Bureau probe, which found that the card issuer was culpable in not doing enough due diligence on who was selling what.
Distributors targeted poor charge card holders
There are credit monitoring services and payment protection offered for Capital One customers who have credit cards. These are provided through third party vendors, according to ABC, and are meant as a sort of insurance. If a person misses work because they are sick or injured and cannot make a payment, a minimum payment is made on the behalf of the person.
If a customer called the call center to activate a card and had poor credit, it took at least 8 minutes to get through the call while listening to a ton of sales pitches from operators who would over exaggerate the service a ton. There was a ton of pressure in those phone calls to get the extra things. The typical consumer would only be on the phone for 2 minutes and did not have to listen to any sales pitches.
There were false promises from the operators, such as telling those without jobs that they could get a few payments from payment protection even though the consumer would not really qualify. They would also promise that a credit rating would improve with the product.
Millions in charges
Capital One has to pay $210 million in in fines because it lost the ability to regulate what was being sold and the way it was being sold with the 3rd party vendors. The bank has to stop selling Ancillary charge card products until it can find ways to regulate the goods better. $150 million of the fee will be given to Capital One clients who were deceived, $35 million will go to the Office of the comptroller of the Currency, and $25 million will be paid to the Consumer Financial Protection Bureau.
Capital One dealt with a similar case in England in 1997, according to ABC, which also require customers to get paid out money. There will be 2.5 million businesses in the U.S. who will receive their money soon, according to USA Today. A CFPB investigation like this is being done with Discover Financial also.
Consumer Financial Protection Bureau, Capital One resolve first enforcement by agency
The Consumer Financial Protection Bureau, regardless of its controversial beginnings and controversial appointment of a director, hasn't really done much in the way of enforcement, besides proposing some rules and so forth, at least until now.
The bureau has brought and also finished its first enforcement action, according to the Wall Street Journal, against credit card company Capital One. The CFPB Capital One case stemmed from third-party vendors who were selling financial goods to go with Capital One's charge cards, like credit protection and payment protection. Capital One was subject of a Consumer Financial Protection Bureau probe, which found that the card issuer was culpable in not doing enough due diligence on who was selling what.
Distributors targeted poor charge card holders
There are credit monitoring services and payment protection offered for Capital One customers who have credit cards. These are provided through third party vendors, according to ABC, and are meant as a sort of insurance. If a person misses work because they are sick or injured and cannot make a payment, a minimum payment is made on the behalf of the person.
If a customer called the call center to activate a card and had poor credit, it took at least 8 minutes to get through the call while listening to a ton of sales pitches from operators who would over exaggerate the service a ton. There was a ton of pressure in those phone calls to get the extra things. The typical consumer would only be on the phone for 2 minutes and did not have to listen to any sales pitches.
There were false promises from the operators, such as telling those without jobs that they could get a few payments from payment protection even though the consumer would not really qualify. They would also promise that a credit rating would improve with the product.
Millions in charges
Capital One has to pay $210 million in in fines because it lost the ability to regulate what was being sold and the way it was being sold with the 3rd party vendors. The bank has to stop selling Ancillary charge card products until it can find ways to regulate the goods better. $150 million of the fee will be given to Capital One clients who were deceived, $35 million will go to the Office of the comptroller of the Currency, and $25 million will be paid to the Consumer Financial Protection Bureau.
Capital One dealt with a similar case in England in 1997, according to ABC, which also require customers to get paid out money. There will be 2.5 million businesses in the U.S. who will receive their money soon, according to USA Today. A CFPB investigation like this is being done with Discover Financial also.
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