CFPB Slams Two Credit Card Add-On Companies for Unfair Billing Practices

CFPB Slams Two Credit Card Add-On Companies for Unfair Billing Practices

July 1, 2015         Written By John H. Oldshue

Today, the Consumer Financial Protection Bureau has fined two companies, Intersections, Inc. and Affinion Group Holdings, Inc, for selling credit card add-on products to consumers, but never providing the services to the buyers.

Many credit card companies work through third-party vendors to offer “add-on” services such as identity theft protection or credit monitoring to cardholders for a monthly fee. The CFPB alleges that these two companies sold these add-on products but failed to provide consumers with the services they purchased.

The complaint against Affinion Group Holdings, Inc. alleges the company sold these add-on products between July 2010 and August 2012 to at least 73,000 customers. Consumers were charged between $6.95 and $15.99 per month to their credit cards or directly to their deposit accounts.

The CFPB claims Intersections, Inc. sold products from 2009 through early 2013 to over 300,000 customers. They were promised access to their credit reports and a credit score, email or phone alerts when new credit accounts were opened, and access to a phone representative to respond to their credit report questions. They paid between $8 and $13 per month for these services, charges that were usually billed directly to their credit cards.

The CFPB fined each company and required them to provide refunds to affected customers.

Affinion must refund nearly $6.8 million to eligible consumers who have not yet received their money back, as well as $1.9 million in civil money penalties. Intersections has already paid back money to a majority of affected customers, but still owes approximately $55,000 in refunds, in addition to $1.2 million in civil money penalties.

“Consumers have every right to get what they pay for,” said CFPB Director Richard Cordray in a statement. “But we are still finding that thousands of consumers paid for add-on benefits they were promised but never received. We continue to address unlawful conduct in this space and are signaling to other financial institutions and their service providers that their marketing and billing practices must be fair to consumers.”



The information contained within this article was accurate as of July 1, 2015. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


john-oldshue

About John H. Oldshue

John Oldshue is the creator of LowCards.com. He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for LowCards.com.
View all posts by John H. Oldshue
Featured Limited/No Credit
Top Features : No annual fee; reports to major credit bureaus; access to higher credit line after making first 5 monthly payments on time
Featured Fair Credit Card
Top Features : No annual fee; access to higher credit line after making first 5 monthly payments on time
Featured Low Interest Card
Top Features : 1.25X miles on every purchase; no annual fee; bonus of 20,000 miles once $1,000 is spent in first 3 months
Featured Cash Back Card
Top Features : 1.5% cash back on all purchases; $150 bonus after spending $500 in first 3 months
Featured No Annual Fee Card
Top Features : 2% cash back on purchases: 1% when you buy plus 1% as you pay; 0% APR for 18 months on balance transfers
Featured Bad Credit Card
Top Features : Perfect credit not required; Reports to major credit bureaus