The CFPB has finally finished its first regulatory investigation. The probe was conducted into credit card-related goods sold by distributors employed by Capital One, in an unlawful manner. The Consumer Financial Protection Bureau Capital One case has resulted in the bank having to pay more than $200 million in fees and restitution.
Found and fixed first problem
Until now, the Consumer Financial Protection Bureau has not really done anything to enforce or change things except it added a few little laws. It has had a controversial start.
The agency has brought and also finished its first enforcement action, according to the Wall Street Journal, against charge card business Capital One. The CFPB Capital One case stemmed from third-party distributors 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.
Poor target group
There are other services that can be purchased through third party distributors to go with Capital One Charge cards, according to ABC. One of them, payment protection, will make a minimum payment on behalf of somebody who is sick or injured and cannot make it to work. It is a sort of insurance against missing a payment. The other service offered is credit monitoring.
If a consumer 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 lot of sales pitches from operators who would over exaggerate the service a ton. There was a lot 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.
Phone operators promised things like purchasing the product would improve credit scores, or that consumers who were already jobless could get a few payments made for them from payment protection, which needs the policy holder to be employed.
Capital One fees
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 distributors. The bank has to stop selling Ancillary charge card goods until it can find ways to regulate the products 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.
Discover financial is facing the Consumer Financial Protection Bureau on comparable charges, meaning Capital One is not alone. Capital One also had to pay out a lot of money in England in 1997 due to a similar case. There are 2.5 million customers who will, later this year, receive their money, according to USA Today. Capital One is going to make things right.
Found and fixed first problem
Until now, the Consumer Financial Protection Bureau has not really done anything to enforce or change things except it added a few little laws. It has had a controversial start.
The agency has brought and also finished its first enforcement action, according to the Wall Street Journal, against charge card business Capital One. The CFPB Capital One case stemmed from third-party distributors 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.
Poor target group
There are other services that can be purchased through third party distributors to go with Capital One Charge cards, according to ABC. One of them, payment protection, will make a minimum payment on behalf of somebody who is sick or injured and cannot make it to work. It is a sort of insurance against missing a payment. The other service offered is credit monitoring.
If a consumer 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 lot of sales pitches from operators who would over exaggerate the service a ton. There was a lot 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.
Phone operators promised things like purchasing the product would improve credit scores, or that consumers who were already jobless could get a few payments made for them from payment protection, which needs the policy holder to be employed.
Capital One fees
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 distributors. The bank has to stop selling Ancillary charge card goods until it can find ways to regulate the products 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.
Discover financial is facing the Consumer Financial Protection Bureau on comparable charges, meaning Capital One is not alone. Capital One also had to pay out a lot of money in England in 1997 due to a similar case. There are 2.5 million customers who will, later this year, receive their money, according to USA Today. Capital One is going to make things right.
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