OCC Assesses Civil Money Penalty Against Capital One, Orders Restitution to 2.5 Million Customers

WASHINGTON — The Office of the Comptroller of the Currency (OCC) today announced a $35 million civil money penalty against Capital One Bank (USA), N.A., for violations of section 5 of the Federal Trade Commission (FTC) Act, and ordered the bank to reimburse $150 million to 2.5 million affected consumers.

The OCC order also requires the bank to stop the sales and marketing of any debt suspension product, debt cancellation product, credit and identity monitoring products, or any other similar products, and to take other corrective action to ensure compliance with consumer protection laws, including the FTC Act.

The OCC based its $35 million penalty on the bank’s failure to develop and implement a comprehensive and effective enterprise risk-management program to detect and prevent unfair and deceptive practices, and the duration of and failure to correct those practices.

The estimated $150 million restitution will include reimbursement to several groups of consumers enrolled in debt cancellation and credit and identity monitoring products that were marketed and sold by the bank and bank vendors.  The bank will reimburse certain credit cardholders who enrolled or were retained, by telephone, in Payment Protection and Intersections credit monitoring products on or after August 1, 2010, the full amount of fees paid for these products, and associated overlimit fees and finance charges.  

For cardholders in that group who were denied a claim because the cardholder’s loss occurred prior to the time of enrollment in Payment Protection, the bank will reimburse the higher of the average amount of the Payment Protection benefit they would have received had their claim not been denied or the full amount of fees they paid for Payment Protection, and any associated overlimit fees and finance charges.  The bank also will reimburse consumers harmed by the bank’s unfair practices in connection with charges for these products, that occurred between March 1, 2006, and June 21, 2011, related to Affinion credit monitoring products, and unfair billing practices that occurred between May 13, 2002, and May 31, 2011, related to Intersections credit monitoring products.

This action is being taken in coordination with the separate action of the Consumer Financial Protection Bureau (CFPB), which is assessing a $25 million civil money penalty against Capital One for violations of section 1036 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, (12 U.S.C. section 5536), and is ordering restitution to harmed consumers.  Restitution payments made by the bank pursuant to the OCC’s order will also satisfy identical payment obligations required by the CFPB action.  The civil money penalties assessed by the OCC are payable to the U.S. Treasury.

Related Links

• Consent Cease and Desist Order (PDF)
• Consent Order for a Civil Money Penalty (PDF)