Capital One Settles Over Vendors' Missteps

Capital One Bank will pay $210 million to settle federal charges that it tricked credit card customers into buying costly add-on services like payment protection and credit monitoring. The case is the first enforcement action from the new Consumer Financial Protection Bureau.

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STEVE INSKEEP, HOST:

NPR's business news starts with Capital One paying up.

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INSKEEP: Got to find out what's in there. Well, that's - Capital One will pay $210 million to settle federal charges. The government says the bank's vendors misled customers about some of the credit card services they offer. This is the first enforcement action from the new Consumer Financial Protection Bureau.

NPR's Jim Zarroli reports.

JIM ZARROLI, BYLINE: The bureau says that when certain Capital One customers called to activate their credit cards, they were directed to a calling center. It was staffed not by Capital One employees but by third-party vendors hired by the bank. These vendors then used high-pressure tactics to persuade the customers to buy additional features, such as payment protection and credit monitoring services.

The bureau says customers were misled into thinking the products would improve their credit scores and weren't always told they were optional. They were also sometimes told the services were free. Sometimes customers were even enrolled in the programs without their consent and when they tried to cancel them they had difficulty doing so.

Under the enforcement action, Capital One agreed to refund money paid by some two million customers and also said it would pay a $60 million fine. Capital One said its vendors had departed from the scripts they were supposed to use during sales calls and it apologized to its customers.

The enforcement action was announced by the Comptroller of the Currency, which regulates the bank, and by the Consumer Financial Protection Bureau, which was formed under the Dodd-Frank financial overhaul bill that Congress passed.

Jim Zarroli, NPR News, New York.

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