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CFPB Announces Capital One Bank To Pay $165 Million For Deceptive Marketing Tactics

Logo for Consumer Financial Protection Bureau The Consumer Financial Protection Bureau (CFPB) announced Wednesday the terms of a Consent Order where Capital One Bank (USA), N.A. will pay both $140 million to about 2 million customers, and a $25 million fine for deceptive marketing tactics. After an investigation, the CFPB:

"... identified deceptive marketing tactics used by Capital One’s vendors to pressure or mislead consumers into paying for “add-on products” such as payment protection and credit monitoring when they activated their credit cards."

The CFPB found that Capital One vendors misled customers about the benefits of these add-on products (e.g., increase their credit scores), deceived about how the products operated (e.g., not always told that the products were optional), misled about their eligibility (e.g., some call center representatives sold products to ineligible consumers), misinformed consumers about the cost of products (e.g., told it was free when it wasn't), and enrolled without their consent.

Additional enforcement actions by the CFPB against Capital One Bank:

  • Stop marketing these add-on products until after the bank submits a compliance plan to the CFPB that is approved by the CFPB
  • The $140 million reimbursement of consumers includes interest, and applies to customers who either enrolled in or tried to to cancel an add-on product on or after August 1, 2010
  • Pay claims that were previously denied to truly eligible customers
  • Payments will a credit to current Capital One Bank customers, or a check to former customers
  • An independent auditor will review the bank's actions for compliance with the Consent Order

The CFPB also disclosed that this Consent Order was:

"... in coordination with the Office of the Comptroller of the Currency (OCC), which is separately ordering restitution of approximately $150 million from Capital One. This amount includes the same $140 million refund... The OCC’s order also includes separate restitution for additional consumers harmed by unfair billing practices taking place between May 2002 and June 2011 in violation of Section 5 of the Federal Trade Commission (FTC) Act. For the combined activity, the OCC is assessing a $35 million civil money penalty against Capital One."

It an separate press release, the OCC:

"... based its $35 million penalty on the bank’s failure to develop and implement a comprehensive and effective enterprise risk-management program to detect and prevent unfair and deceptive practices, and the duration of and failure to correct those practices."

In a press release from the bank, Ryan Schneider the President of Capital One's Card business said:

"We are accountable for the actions that vendors take on our behalf... These marketing calls were inconsistent with the explicit instructions we provided to agents for how these products should be sold. We apologize to those customers who were impacted and we are committed to making it right."

The bank's press release did not state whether it fired its vendors involved in these deceptive marketing tactics, or took other monetary, legal, or disciplinary actions. Nor did it state what disciplinary actions, if any, it took against the bank's executives in charge of hiring or managing the vendors' activities. Ideally, those actions will be outlined in the compliance plan so these types of deceptive marketing tactics don't happen again with the same or different vendors.

It is wonderful to see the CFPB protecting the interests of consumers, and coordinating its enforcement actions with other agencies. As a Capital One credit card customer, I am doubly pleased. What's in Capital One Bank's customers' wallets? A little more money soon from Capital One.


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The action, announced on July 18, was made in coordination with the Office of the Comptroller of the Currency (OCC). It resulted from a CFPB examination that identified “deceptive marketing tactics” used by Capital One's vendors “to pressure or mislead consumers” into paying for add-on products.


Thanks to any association which protects consumers. People should understand that they have to be careful with the way they invest, especially in such difficult economic times investors should understand that due to volatile stock market conditions they should switch to trading.


CFPB is doing a great job and thanks for it. But, I feel it is important to instill in investors a sense of responsibility while investing their money. We live in times of recession and being careful is mandatory.

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