The federal government today ordered Capital One to refund $150 million to 2.5 million of its customers for deceptively marketing some of its add-on credit-protection services.
The penalty follows separate investigations by Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller of the Currency (OCC) that concluded that when Capitol One customer-service representatives pitched credit-monitoring, identity-theft-protection and payment-protection services to new customers, they didn’t disclose fully that the services were voluntary and included monthly fees that would be billed to their credit card automatically.
Capital One also agreed to stop marketing the services until it submits a compliance plan to CFPB.
Each of the 2.5 million customers will receive a refund in the amount that they paid for these services, according to OCC spokesperson Bryan Hubbard. So, for example, if a customer paid $120 in fees for these services, he/she would be refunded $120.
Capital One customers who enrolled in add-on services or tried to cancel a service on or after Aug. 1, 2010, will receive a refund credit on their account. Those who no longer are Capital One customers will receive a refund check in the mail.
According to CFPB, Capitol One made it difficult for customers to cancel the service. Customer representatives also told some customers that the products would improve customers’ credit scores, CFPB says.