Previously, we warned consumers that their credit card companies may have sold them worthless credit card protection plans. We referred to an action filed by the Hawaii Attorney General against seven major banks (Bank of America, Barclays, Capital One, Chase, Citibank, Discover, and HSBC), claiming the banks sell worthless payment protection plans to consumers. The banks use highly misleading information in order to induce consumers to enroll in credit protection plans for which they do not even qualify. The result, the consumer is charged a monthly fee for an unneeded and often worthless payment protection plan.
Now, in its first action since formation, the Consumer Financial Protection Bureau slapped Capital One with findings that the bank deceived card holders into buying protection plans for identity theft and hardships like unemployment or disability that were costly and ineffective. As a result, Capital One will reimburse $150 million to more than two million customers for selling them credit card products they could not use or did not want. As reported by the New York Times, “this practice is hardly limited to Capital One.” If you or someone you know has been sold a worthless payment protection plan by your credit card company, please contact us to discuss your legal rights.