Reuters: Regulatory News: UPDATE 1-Capital One to pay $210 million in credit card probe

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UPDATE 1-Capital One to pay $210 million in credit card probe Jul 18th 2012, 15:05 Wed Jul 18, 2012 11:05am EDT By Alexandra Alper WASHINGTON, July 18 (Reuters) - Capital One Financial will pay $210 million to resolve charges from U.S. consumer and banking regulators that it s vendors mi sled consumers into paying for extra credit card products. The Consumer Financial Protection Bureau (CFPB), in its first public enforcement action, said it is requiring the bank to pay a $25 million penalty. Capital One will also pay the Office of the Comptroller of the Currency an additional $35 million penalty, and reimburse affected customers $150 million. "We are putting companies on notice that these deceptive practices are against the law and will not be tolerated," said CFPB Director Richard Cordray. The CFPB said its actions were based on an examination of Capital One Bank, which identified deceptive marketing tactics used by the bank's call center vendors to pressure or mislead consumers into paying for "add-on products" such as payment protection and credit monitoring when they activated their credit cards. A Capital One official apologized to customers who were a ffecte d and said it is committed to "making it right." "We are accountable for the actions that vendors take on our behalf," said Ryan Schneider, p r esident of Capital One's c a rd business. "These marketing calls were inconsistent with the explicit instructions we provided to agents for how these products should be sold." The enforcement action comes just months after the U.S. Federal Reserve approved the bank's hotly debated acquisition of ING Groep NV's U.S. online banking unit. The approval came in February after a series of hearings, where civic groups accused the bank of improper lending practices. Link this Share this Digg this Email Reprints

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