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CFPB's Action Against Capital One and a Look at CFPB's Complaint Database
The OCC and the new Consumer Financial Protection Bureau (CFPB) announced yesterday civil money penalties against Capital One Bank. It's the first enforcement action by the CFPB since it began operation last year. According to the CFPB press release:
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.
Capital One actually apologized to its customers in this press release:
"We are accountable for the actions that vendors take on our behalf," said Ryan Schneider, President of Capital One's Card business. "These marketing calls were inconsistent with the explicit instructions we provided to agents for how these products should be sold. We apologize to those customers who were impacted and we are committed to making it right."
In February the Federal Reserve gave its approval for Capital One's acquisition of ING DIRECT. You have to wonder if this approval would have been given or delayed if this action was known to be pending.
CFPB's Consumer Complaint Database
Another sign of problems with Capital One's credit card business can be seen by CFPB's new complaint database. Capital One is on top of the list as the credit card issuer with the most complaints.
Last month the CFPB made available to the public its consumer complaint database. It currently only includes credit card complaints that have been submitted from 6/1/2012. Non-personal information for each complaint is included in the database. That includes the company which is the target of the complaint. You can review the database at this CFPB webpage.
I downloaded the CFPB credit card complaint data today and ran it through a program to rank the complaints by bank. There were a total of 1,802 complaints. One would expect that the largest credit card issuers would have the most complaints. However, that wasn't always the case, and the first example was Capital One. It had the most complaints, but according to Card Hub table from the 2011 Nilson Report, Capital One was only the fifth largest credit card issuer based on purchase volume. I included these numbers in parentheses next to the names of the banks in the table below.
There were only two credit unions in the database. Pentagon FCU had two complaints and Navy FCU had one complaint. This Credit Union Times article reviewed these complaints. It's interesting to note that we have negative reviews on Navy Federal in our review database. A common complaint that has been reported is that Navy Federal will freeze and or debit checking and savings accounts if any problems arise on the credit card accounts.
Credit Card Complaints Submitted to CFPB Since June 1st
| # | Bank/Credit Union | # of Complaints | Percentage |
| 1 | Capital One (5) | 408 | 22.64% |
| 2 | Citibank (4) | 322 | 17.87% |
| 3 | JPMorgan Chase (2) | 277 | 15.37% |
| 4 | Bank of America (3) | 238 | 13.21% |
| 5 | GE Capital Retail (12) | 130 | 7.21% |
| 6 | Amex (1) | 100 | 5.55% |
| 7 | Discover (6) | 80 | 4.44% |
| 8 | Wells Fargo (8) | 72 | 4.00% |
| 9 | Barclays (10) | 51 | 2.83% |
| 10 | U.S. Bancorp (7) | 29 | 1.61% |
| 11 | USAA Savings (11) | 22 | 1.22% |
| 12 | First National | 12 | 0.67% |
| 13 | PNC BANK (13) | 11 | 0.61% |
| 14 | Fifth Third Bank | 11 | 0.61% |
| 15 | RBS Citizens | 6 | 0.33% |
| 16 | TD Bank | 5 | 0.28% |
| 17 | Regions | 4 | 0.22% |
| 18 | First Niagara Bank | 4 | 0.22% |
| 19 | SunTrust Bank | 2 | 0.11% |
| 20 | Pentagon FCU | 2 | 0.11% |
| 21 | Commerce Bank | 2 | 0.11% |
| 22 | BB&T Financial | 2 | 0.11% |
| 23 | Zions First National Bank | 1 | 0.06% |
| 24 | The Huntington National Bank | 1 | 0.06% |
| 25 | Synovus Bank | 1 | 0.06% |
| 26 | State Farm Bank | 1 | 0.06% |
| 27 | People's United Bank | 1 | 0.06% |
| 28 | Navy FCU | 1 | 0.06% |
| 29 | FirstMerit Bank | 1 | 0.06% |
| 30 | E*Trade Bank | 1 | 0.06% |
| 31 | Bank of the West | 1 | 0.06% |
| 32 | BMO Harris | 1 | 0.06% |
| 33 | BBVA Compass | 1 | 0.06% |
| 34 | Ally Bank | 1 | 0.06% |
| Total | 1802 |
Notes regarding the table:
This table is based on data that was downloaded from the CFPB database on 7/19/2012. The numbers in parentheses to the right of the bank names are the rankings of purchase volume of the top 15 U.S. credit card issuers based on the Card Hub table based on the 2011 Nilson Report.
The banks will stop offering free services and or accounts, will keep the rates unfriendly to the consumers and will become more un-personal.
The errors will be blamed on the consumers and the resolutions to the problems will take longer time to solve. If you depend on the bank for your daily business and you complain too much, your account may be frozen and or closed while in dispute of any transaction.
So, if you think you have a friend in uncle Sam, think twice, before you complain, your credit may be damaged by the bank reporting you as delinquent if you don’t pay your bills while in dispute resolution state.
Complaining to the FEDS before trying to settle with the bank, may cost you more at the end than the bank reputation. You represent a speck of dust in the banking system and being to confident and feeling powerful will back fire on you.
The banks are known for reporting to chexsystems individuals as complainer and may bar you to ever open a new account at any other bank too.
I had a problem with Bank of America's credit card. I got it on an offer of an alleged $250 bonus after the first $500 worth of purchases. I made my purchases, and much more, but they never credited my account with the money. I called, called, called, and the customer rep. initially denied that such an offer existed. Then, when I faxed in a copy of it (I keep all offers), she called me bac, admitted to the existance of the offer, and told me my account would be credited appropriately. Never happened.
I called again. Same routine. Then a few months later, again. Same routine. Over and over again, until I stopped using the credit card and, mysteriously, it disappeared from my Bank of America online banking summary page, after about 2 years of non-use. It has been about 3 years, but the statute of limitations for a lawsuit has not passed yet, so I am going to report them to this new agency for fraud.