CFPB Has History of Cracking Down on Illegal Credit Card Practices
Today’s actions by the CFPB against Bank of America for illegal credit card practices was the fifth such crackdown on a major credit card issuer by the Bureau in the past two years.
As reported earlier, Bank of America was ordered by the Consumer Financial Protection Bureau to refund $727 million to consumers who were deceived by the bank’s marketing of credit card payment protection programs and others who were charged for credit monitoring services they never received. In addition, the Office of the Comptroller of the Currency fined Bank of America $25 million in civil penalties for unfair billing practices. The bank also has to pay $20 million to the CFPB Civil Penalty Fund.
In September 2013, the Bureau ordered JPMorgan Chase to refund $309 million to credit card customers that were improperly billed for add-on products. The CFPB and the Office of the Comptroller of the Currency concluded that 2.1 million cardholders were billed for services they never received. These add-on products included identity theft protection and fraud monitoring. Chase charged monthly fees ranging from $7.99 to $11.99. The investigation found that the company even charged customers for these services before the customers gave any authorization.
In October 2012, American Express was ordered to refund $85 million to customers and pay $27.5 million in civil penalties to settle regulators’ accusations that the company violated a number of consumer protection laws. The issuer led customers to believe they would receive $300 for signing up for the Blue Sky credit card. The customers who fulfilled the conditions of the offer never received the money. In addition, American Express was accused of making false statements to persuade customers to pay off their credit card balances. The regulators said customers were told that if they agreed to pay off part of their debt, the remaining portion of the balance would be forgiven.
In September 2012, the CFPB and the FDIC announced that Discover had to refund $200 million to their credit card customers for pressuring cardholders into buying expensive payment protection and credit monitoring services. Discover also had to pay a $14 million fine.
Finally, in July 2012, Capital One agreed to pay up to $150 million to two million consumers as a result of the bank’s telemarketers deceptively pushing credit monitoring and payment protection services. In addition, Capital One agreed to pay fines of $25 million to the CFPB and $35 million to the Office of the Comptroller of the Currency.