The CFPB has finally finished its first regulatory investigation. The probe was conducted into credit card-related goods sold by vendors used by Capital One, in an unlawful manner. The Consumer Financial Protection Bureau Capital One case has led to the bank having to pay more than $200 million in fees and restitution.
First fix from CFPB
The start of the Consumer Financial Protection Bureau was really controversial, regardless of the belief that it has taken almost a year for the agency to do anything besides enact a few laws.
The agency has brought and also finished its first enforcement motion, according to the Wall Street Journal, against credit card business Capital One. The CFPB Capital One case stemmed from third-party vendors who were selling financial products to go with Capital One's credit cards, like credit protection and payment protection. Capital One was subject of a Consumer Financial Protection Bureau investigation, which found that the card issuer was culpable in not doing enough due diligence on who was selling what.
Poor target group
There are credit monitoring services and payment protection offered for Capital One consumers who have credit cards. These are provided through 3rd party vendors, according to ABC, and are meant as a type of insurance. If an individual misses work because they are sick or injured and cannot make a payment, a minimum payment is made on the behalf of the person.
If a consumer called the call center to activate a card and had poor credit, it took at least 8 minutes to get through the call while listening to a ton of sales pitches from operators who would over exaggerate the service a ton. There was a lot of pressure in those phone calls to get the extra things. The typical consumer would only be on the phone for 2 minutes and did not have to listen to any sales pitches.
Phone operators promised things like getting the product would improve credit scores, or that consumers who were already jobless could get a few payments made for them from payment protection, which requires the policy holder to be employed.
Millions in fees
Because of the investigation, it was decided that Capital One does not have the ability to regulate vendors well enough to know what is being sold to consumers and the way it is being sold. Until the bank can ensure product conduct, it can no longer sell the extra goods with credit cards. It also was ordered to pay $210 million in fines; the Office of the Comptroller will get $35 million and the CFPB will get $25 million. The other $150 million will be given to Capital One clients as restitution.
According to USA Today, the 2.5 million customers wronged in the case will receive their money later this year. It is the second time Capital One has faced such charges, as the bank resolved a comparable case in England in 1997, according to ABC. Discover Financial is said to be currently facing a comparable Consumer Financial Protection Bureau investigation.
First fix from CFPB
The start of the Consumer Financial Protection Bureau was really controversial, regardless of the belief that it has taken almost a year for the agency to do anything besides enact a few laws.
The agency has brought and also finished its first enforcement motion, according to the Wall Street Journal, against credit card business Capital One. The CFPB Capital One case stemmed from third-party vendors who were selling financial products to go with Capital One's credit cards, like credit protection and payment protection. Capital One was subject of a Consumer Financial Protection Bureau investigation, which found that the card issuer was culpable in not doing enough due diligence on who was selling what.
Poor target group
There are credit monitoring services and payment protection offered for Capital One consumers who have credit cards. These are provided through 3rd party vendors, according to ABC, and are meant as a type of insurance. If an individual misses work because they are sick or injured and cannot make a payment, a minimum payment is made on the behalf of the person.
If a consumer called the call center to activate a card and had poor credit, it took at least 8 minutes to get through the call while listening to a ton of sales pitches from operators who would over exaggerate the service a ton. There was a lot of pressure in those phone calls to get the extra things. The typical consumer would only be on the phone for 2 minutes and did not have to listen to any sales pitches.
Phone operators promised things like getting the product would improve credit scores, or that consumers who were already jobless could get a few payments made for them from payment protection, which requires the policy holder to be employed.
Millions in fees
Because of the investigation, it was decided that Capital One does not have the ability to regulate vendors well enough to know what is being sold to consumers and the way it is being sold. Until the bank can ensure product conduct, it can no longer sell the extra goods with credit cards. It also was ordered to pay $210 million in fines; the Office of the Comptroller will get $35 million and the CFPB will get $25 million. The other $150 million will be given to Capital One clients as restitution.
According to USA Today, the 2.5 million customers wronged in the case will receive their money later this year. It is the second time Capital One has faced such charges, as the bank resolved a comparable case in England in 1997, according to ABC. Discover Financial is said to be currently facing a comparable Consumer Financial Protection Bureau investigation.
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