Capital One to pay $210M over tactics

Capital One to pay $210M over tactics

WASHINGTON

The Obama administration’s consumer watchdog agency flexed its enforcement muscles for the first time Wednesday and ordered Capital One Bank to repay millions of credit-card customers reportedly tricked into buying costly add-on services.

Capital One will pay $210 million in refunds and fines. Most of the money will go directly to customers.

The bank’s phone-sales operators told customers that services such as payment protection and credit monitoring were free or mandatory or offered more benefits than they did, federal officials said. The hard- selling targeted people with poor credit, they said.

The order against Capital One is the first enforcement action by the Consumer Financial Protection Bureau, set up a year ago to protect consumers from excessive or hidden fees and other financial threats.

Capital One will pay up to $150 million to 2.5 million customers, $25 million to the CFPB and $35 million to the Office of the Comptroller of the Currency, which oversees its banking operations.

Associated Press