CFPB’s Chopra Puts Card Issuers on Notice
The Consumer Financial Protection Bureau (CFPB) is sending a strong message to card issuers that it will not tolerate deceptive practices. On July 11, 2023, the CFPB announced a settlement with Bank of America (BofA) for deceptive practices related to its credit card add-on products. The settlement requires BofA to pay $25 million in restitution to consumers and a $45 million civil penalty.
CFPB’s Role in Consumer Protection
The CFPB is an independent federal agency created in 2010 to protect consumers from unfair, deceptive, or abusive practices in the financial marketplace. The CFPB has the authority to take action against companies that violate consumer protection laws.
The CFPB’s mission is to ensure that all consumers have access to fair, transparent, and competitive markets for consumer financial products and services. The CFPB works to ensure that consumers are informed and protected from deceptive practices.
BofA’s Deceptive Practices
The CFPB’s investigation found that BofA engaged in deceptive practices related to its credit card add-on products. BofA marketed and sold add-on products, such as identity theft protection and payment protection, to consumers without adequately disclosing the terms and conditions of the products.
The CFPB found that BofA misled consumers about the cost and benefits of the products, failed to adequately disclose the terms and conditions of the products, and failed to provide consumers with accurate information about the products.
CFPB’s Settlement with BofA
The CFPB’s settlement with BofA requires the bank to pay $25 million in restitution to consumers and a $45 million civil penalty. The settlement also requires BofA to stop engaging in deceptive practices related to its credit card add-on products.
The CFPB’s Director, Rohit Chopra, said in a statement that the settlement sends a strong message to card issuers that deceptive practices will not be tolerated. He said, “Card issuers must be honest and transparent with consumers about the costs and benefits of their products. We will continue to take action against companies that violate consumer protection laws.”
Implications for Other Card Issuers
The CFPB’s settlement with BofA is a warning to other card issuers that deceptive practices will not be tolerated. The CFPB has the authority to take action against companies that violate consumer protection laws.
Card issuers should review their practices to ensure that they are not engaging in deceptive practices. They should also ensure that they are providing consumers with accurate information about the costs and benefits of their products.
Conclusion
The CFPB’s settlement with BofA sends a strong message to card issuers that deceptive practices will not be tolerated. The settlement requires BofA to pay $25 million in restitution to consumers and a $45 million civil penalty. Card issuers should review their practices to ensure that they are not engaging in deceptive practices and that they are providing consumers with accurate information about the costs and benefits of their products.