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The CFPB’s Early Victory in Challenging Capital One’s Credit Card Practices

            By now, even those who rarely watch television have run across some of Capital One’s credit cards ads that feature the key line, “What’s In Your Wallet?” While these ads do feature rather humorous antics of uniquely garbed actors, many consumers have complained about the types of services they’ve felt pressured to buy from this company.                                                         However, Capital One is clearly not the only major credit card company (or financial institution) that’s recently been investigated concerning questionable marketing practices -- it may just be the most visible one due to all of the media saturation.                                                                 During the summer of 2012, other banks investigated or sued by the federal government included Bank of America, HSBC and JP Morgan Chase. Like the others, Capital One has strongly urged consumers to purchase “add-on” products that are supposed to protect buyers from identity theft, job loss or disability. Of course, benefitting from those types of services is neither automatic nor easily accessed.                                                                                              Other Recent Charges Brought Against Capital One

  • The consumer advocacy group the National Community Reinvestment Coalition (NCRA) has complained about Capital One’s “subprime and risky lending. About a third of Capital One’s credit card portfolio carries the subprime label, defined as loans to borrowers with credit card scores below 660;”
  • The NCRA also complained about Capital One’s attempt to take over ING’s online banking unit in this country because the deal would “create the next too-big-to-fail banking behemoth;”
  • Capital One was also charged with using call centers to try and persuade ineligible, unemployed customers to buy protection coverage that wouldn’t even benefit them;
  • The Office of the Comptroller of the Currency required Capital One to reimburse customers “harmed by unfair billing practices.” It said these activities “unfolded over a 10-year span, from 2002 to June of [2011]. Apparently, Capital One “billed customers even though it had failed to provide full use” of one or more products sold.

Penalties Assessed Against Capital One             

            Capital One was ordered to “reimburse $150 million to more than two million customers for selling them credit card products they couldn’t use and did not want.” Additional fines were assessed to convince the company that such practices were not only forbidden but would always be closely monitored.                                                                                                                                  In response to some of the accusations, Capital One claimed that some of the wrongful acts committed on its behalf occurred in call centers that “did not always adhere to company sales scripts.” Of course, the company is liable for all such activities since failing to properly monitor such activities is no excuse. Capital One also tried to play down this specific wrongdoing by saying that the victims of the questioned fees were probably only owed an “average [of] less than $100 a person.” 

Conclusions                               

            Unfortunately, some large financial institutions may still keep trying to sell questionable products to consumers barely holding on during this country’s serious economic woes. However, you can hire a Georgia consumer protection attorney to help you if you believe you’ve been treated unfairly by a debt collection agency, credit card company or other financial institution.

If you believe that you’re a victim of any abusive debt collection practice, contact the Law Offices of Georgia consumer protection attorney Shane Smith so that you can learn more about your rights under federal and state consumer protection statutes.  Call (770) 487-8999 today to schedule your free initial consultation.

 

 


Shane Smith
Advocate for the Seriously Injured in Georgia