As the holidays approach, some consumers will receive refunds and restitution from credit card companies, a penalty for misleading consumers with deceptive credit card practices.
Earlier this year, the Consumer Financial Protection Bureau, a consumer finance watchdog organization that was launched in 2011 in the wake of the economic meltdown, ordered American Express, Discover, and Capital One to payout more than $425 million in refunds.
“We think this is definitely a case of enforcement getting better,” Bill Hardekopf, CEO of credit card comparison site LowCards.com, told the Sacramento Bee. He said the CFPB “is establishing the fact that they mean business. Their ‘calling’ is to look after consumers and they are trying to show that they will do just that.”
Of the three credit card companies, American Express subsidiaries were ordered to pay $85 million to around 250,000 cardholders for a variety of illegal practices going all the way back to 2003. Capital One is sending $140 million to two million customers who purchased Capital One financial products after August 2010 and who may have been deceived or didn’t understand the products or items they were buying.
Lastly, Discover will pay $200 million for deceptive telemarketing tactics, including implying that certain paid features were free benefits and not explaining various fees and payments. More than 3.5 million customers will receive funds.
Bank of America, not part of the $425 million CPFB crackdown, is also refunding customers after some deceptive debit card practices that caused millions of customers to receive unfair overdraft fees. Bank of America is refunding $410 million to customers.
So keep an eye on your credit card accounts and mailboxes in the coming weeks if you think you are eligible for these refunds. You can learn more online.