On Wednesday, the U.S. Consumer Financial Protection Bureau fined Capital One Bank $210 million for misleading customers. The CFPB determined that the bank's call-center misled its customers on information regarding credit cards services and facilites.
According to the regulators, customers were made to pay extra for credit-card facilities such as monitoring and payment protection et al. Richard Cordray, director of CFPB said: "Customers were pressured or misled into buying credit card products they didn't understand, didn't want, or in some cases, couldn't even use...We are putting companies on notice that these deceptive practices are against the law and will not be tolerated," according to BBC News.
Ryan Schneider, president of Capital One credit card and business, released a statement apologizing to customers, assuring them that the bank will do everything to "making it right," according to CNBC.Com. Schneider was quick to point fingers at third party vendors in an official statement released on the Capital One website, "These marketing calls were inconsistent with the explicit instructions we provided to agents for how these products should be sold. We apologize to those customers who were impacted and we are committed to making it right."
Capital One, one of the country's largest credit card issuers, was recently scrambling for approval by the Federal Reserve for a merger with NG Group NV's U.S. online banking unit. The Federal Reserve was apprehensive about allowing the merger, since Capital One had been under series allegations of violating consumer issues. At last in February, the Reserve complied, never the less, "Though the merger was approved, it is clear that the scrutiny brought to bear from NCRC's objections has born results for consumers," as stated by NG Group's President John Taylor to CNBC.
The $210 fine imposed by the CFPB was the first of its kind for the establishment, which was created in 2011 by the 2010 Dodd-Frank financial reform law. The bulk of $210 will go to reimbursing customers.
Capital One is said to release its quarterly-earning Thursday.
