Capital One must repay its credit card customers $150 million after federal regulators determined the company was using deceptive business practices to trick its clients into signing up for services they didn't want or need. Although Capital One neither admitted nor denied liability in the settlement -- they claim third party vendors were to blame for the problems -- they won't be able to escape paying an additional $60 million in penalties to the government.
"We are accountable for the actions that vendors take on our behalf," explained Ryan Schneider, president of Capital One's credit card business. "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." And by committed, of course, they mean forced to by the Consumer Financial Protection Bureau.
According to Richard Cordray, director of the aforementioned bureau, Capital One used deceptive practices to get its customers to sign up for such services as payment protection plans and credit monitoring. Employees at various call centers would often lie to card holders about the price of such options, sometimes proclaiming that signing up was free. Others told clients these services weren't optional, leading some to say they felt pressured into getting the products.
Although Capital One is guilty of using such tactics, Cordray stated that such practices were not unique to one single institution. "We are putting companies on notice that these deceptive practices are against the law and will not be tolerated," he stated.
Did you or someone you know fall victim to these extremely shady business transactions? Here's what you need to know about the refund: If you're still a customer with Capital One, then a refund should show up on your account. Those of you who have closed your accounts, however, should receive a check in the mail. These refunds will be issued by the end of the year.