NEW YORK (CNNMoney) — In its first public enforcement action, the Consumer Financial Protection Bureau announced it is fining Capital One Bank for pressuring and misleading two million customers into buying additional products when they opened their credit card accounts.
The bank will refund roughly $140 million to customers and pay an additional $25 million penalty to the CFPB for using deceptive marketing tactics, the government’s consumer watchdog said Wednesday…
The CFPB said that Capital One, one of the nation’s largest credit card lenders, pressured and misled consumers into paying for “add-on products” like payment protection and credit monitoring when they activated their credit cards.
The CFPB said that consumers with low credit scores or low credit limits were sometimes led to believe that the product would improve their credit scores, were misinformed about the cost and were told that purchasing the product was required. Some were even enrolled without their consent.
Cardholders who enrolled in a payment protection or credit monitoring product — or who tried to cancel one of these products but were persuaded by a call center representative to keep it — on or after August 1, 2010, will be refunded the money they paid for the product, as well as any finance charges, over-the-limit fees or interest paid, the CFPB said.