Before Elisabeth Warren became our fave-rave U.S. Senatorial candidate for Massachusetts, before Scott Brown bragged about his secret meetings with kings and queens, Ms. Warren was on the radar for helping to create a little something known as the Consumer Finance Protection Bureau.
You may recall reading about it in a diary or two around these parts.
Anyway, below the Doily from Hell, check out the CFPB's latest coup:
CFPB probe into Capital One credit card marketing results in $140 million consumer refund
WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (CFPB) announced its first public enforcement action with an order requiring Capital One Bank (U.S.A.), N.A. to refund approximately $140 million to two million customers and pay an additional $25 million penalty. This action results from a CFPB examination that identified deceptive marketing tactics used by Capital One’s vendors to pressure or mislead consumers into paying for “add-on products” such as payment protection and credit monitoring when they activated their credit cards.
“Today’s action puts $140 million back in the pockets of two million Capital One customers who were pressured or misled into buying credit card products they didn’t understand, didn’t want, or in some cases, couldn’t even use,” said CFPB Director Richard Cordray. “We are putting companies on notice that these deceptive practices are against the law and will not be tolerated.”
In addition to having to refund $140 million to 2 million people (hey, $70 may not sound like much, but that's a month's electric bill for a lot of people), Capital One also has to cough up another $25 million to the government, along with having to clean up their act in a slew of other ways:
--End deceptive marketing: Capital One has ceased all marketing of these products, and will not resume doing so until Capital One submits a compliance plan, acceptable to the Bureau, which helps ensure these unlawful acts do not occur in the future.
--Pay claims denied based on ineligibility at enrollment: For any of these eligible consumers whose payment protection claims were previously denied because their loss occurred prior to enrollment (because of unemployment, disability, etc.), Capital One will pay their claims as if they had been eligible, if that amount is greater than the refund for that consumer.
--Convenient repayment for consumers: If the consumers are still Capital One customers, they will receive a credit to their accounts. If they are no longer a Capital One credit card holder, they will receive a check in the mail. Consumers are not required to take any action to receive their credit or check.
(this is a big one for me--how many people have blown off small payments or rebates because it was too much of a hassle to bother with?)
--Independent audit: Compliance with the terms of this agreement will be assured through the work of an independent auditor, who will determine if Capital One has complied with the CFPB’s Consent Order.
Let's hear it for Richard Cordray, Elizabeth Warren, Pres. Obama and the CFBP for doing their jobs and doing it well!
~~~~~~~~~~~~~~~~~
Update: OK, this is completely off topic, but the Obama campaign just released another awesome slam on Mitt Romney's Bain Pain:
.
.
This one is a 1-minute web-only ad, but it's fantastic. For those without video, it's basically just man-on-the-street Joe Sixpacks trying to read Romney's painful attempt to explain his "I was the CEO and owner but wasn't involved" stance between 1999 - 2002.
~~~~~~~~~~~~~~~~~~
Update x2: Back on topic:
Huffington Post just took note of the judgment, pointing out that this could help Elizabeth Warren's Senate race as well, since she was so instrumental in setting up the CFPB:
CFPB Announces Enforcement Action Against Capital One
The CFPB action could have a collateral benefit for the godmother of the agency, Elizabeth Warren, who is now running for the U.S. Senate in Massachusetts. Warren is credited with laying the intellectual foundation for the CFPB, fought to include it as part of Wall Street reform legislation, and was named by President Barack Obama to staff and set up the bureau.
Opposition from banks, from Republicans and from within the White House prevented her from winning a permanent appointment to run the bureau she created, but many of its senior officials remain loyal to her and to her vision for it.
The enforcement action now raises the CFPB's profile, thereby reminding voters in Massachusetts about Warren's consumer-friendly background, which she regularly contrasts with that of her opponent, incumbent Republican Sen. Scott Brown, whose support on Wall Street runs deep. Brown even has a separate political action committee geared primarily toward raising cash from bankers.
Update x3: The CFPB is also making it VERY clear how the refunds will be handled:
Capital One customers: If you’re eligible for a refund and you have an open account, the refund will be automatically credited to your account. If you’re eligible but no longer have an account with Capital One, a check will be mailed to you. You should expect to receive your refund later this year. You don’t need to take any action to get your refund.
If you have questions about whether you are entitled to a refund, please contact Capital One.
So, it doesn't specify a date when the refunds will be issued, but says it'll be sometime between now and the end of the year. The only question left unanswered is whether they're going to require the letter accompanying the check to specifically credit the CFPB (and the Obama administration) for the refund, the way that the
ACA Medical Loss Ratio refunds have to.