Widely reported Chase has agreed to pony up $125 million regarding collections and sales of consumer credit card debt. An announcement is expected today. The CFPB has been on a rampage regarding credit card “add-on” products.
According to Reuters, the tentative agreement calls for the states to share roughly $95 million, while the CFPB will collect approximately $30 million, according to the report. The settlement is also expected to include about $50 million in consumer restitution.
The action, which also included allegations by the Office of the Comptroller of the Currency, charged the bank engaged in unfair billing practices for credit card “add-on” products by charging consumers for credit monitoring services they didn’t receive.
Separately, the CFPB in 2013 ordered JPMorgan to refund an estimated $309 million to more than 2.1 million customers for illegal credit card practices.
Earlier this week, the Consumer Financial Protection Bureau (CFPB) took action against two credit card add-on product vendors – Affinion and Intersections for unfairly charging consumers for credit card add-on benefits they did not receive.
Under the proposed consent orders, Affinion would pay approximately $6.8 million in monetary relief for eligible consumers who have not yet received refunds and $1.9 million in civil money penalties, while Intersections would pay approximately $55,000 in monetary relief to eligible consumers who have not yet received refunds and $1.2 million in civil money penalties.
The CFPB’s investigations revealed that Affinion and Intersections engaged in unfair practices related to the billing or administration of these products in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
Today’s two actions build on several of the Bureau’s past actions against banks to address illegal practices in the marketing or administration of add-on products. This is the first time the Bureau has brought actions directly against the companies that provided these products and services.
The CFPB also alleges Affinion or its partner banks billed full product fees to at least 73,000 accounts while failing to provide the full credit monitoring or credit report retrieval services promised, and failed to refund fees to those consumers.
Furthermore, the CFPB alleges Intersections billed or instructed the banks to bill approximately 300,000 consumers who signed up for their products knowing they were not receiving all the benefits for which they paid.
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