Capital One fined for misleading millions of customers

A credit card Capital One has been fined for misleading customers

A US regulator has fined the credit card provider Capital One Financial for misleading millions of customers into buying unnecessary products.

Capital One has agreed to pay $210m (£134m) to settle the case and refund two million customers.

The Consumer Financial Protection Bureau (CFPB) said "deceptive marketing tactics" had been used.

Consumers had to pay for extras such as payment protection and credit monitoring when they took out a card.

CFPB director Richard Cordray 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," he added.

Capital One, one of the US's biggest issuers of credit cards, said it will refund customers $150m, pay a $25m fine to the CFPB and an additional $35m to the Office of the Comptroller of the Currency.

Accountable

Ryan Schneider, president of Capital One's card business said agents were responsible, but that the company would take responsibility for their actions: "We are accountable for the actions that vendors take on our behalf."

"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," he said in a statement.

The CFPB action is the regulator's first enforcement action since it began operating last year in the wake of the US subprime crisis.

The case against Capital One comes amid simmering public anger against banks' improper lending practices.

Last month British bank Barclays was fined for trying to rig the key Libor rate, which underpins trillions of financial contracts worldwide, including some mortgages in the US.

Rival global bank HSBC also faces a fine for improper behaviour which included money laundering for Mexican drug barons.

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