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August 1, 2012 / Christian Przybylowski

Capital One to Settle $210 Million Lawsuit

Capital One will have to pay $210 million to settle a lawsuit alleging that it tricked customers into purchasing unwanted credit card products and programs by fraudulently adding payment protection and credit monitoring onto their Capital One accounts. Approximately 2 million customers are eligible to share in a portion of the settlement amount.

According to the Consumer Financial Protection Bureau (CFPB), the agency enforcing the settlement, Capital One call center workers would lead customers to believe that the additional products were free or that they were necessary in order to activate the card. Some customers were told their credit scores would improve with the purchase of the additional products. Some customers who were ineligible for the products were charged for them anyway.

There were similar accusations against Discover Financial Services, which reached a settlement in a class action lawsuit earlier this year. The CFPB has said it will be going after Discover next and that they intended to show credit card companies that “these deceptive practices are against the law and will not be tolerated.”

After penalties and fees, approximately $140 million will be returned to Capital One customers who were affected by the deceptive practices. Refunds to eligible consumers will automatically be deposited into their Capital One accounts. Any consumers who no longer have a Capital One account will have checks mailed to them.

Capital One has attempted to lay the blame with third party vendors, who did not always use approved scripts and policies when selling the additional credit products.

If you or a loved one feels they have been the victim of deceptive sales practices, please contact Khorrami, LLP for a confidential evaluation of your rights.

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