RSSThe Consumer Financial Protection Bureau has ordered U.S. Bank to refund $48 million for unfair billing practices related to add-on products offered through a vendor.
The joint order with the Office of the Comptroller of the Currency includes $47.9 million in restitution to more than 420,000 customers, a $4 million civil money penalty leveled by the OCC and a $5 million civil money penalty charged by the CFPB.
According to the CFPB order, U.S. Bank’s service provider, Affinion, and its subsidiary Trilegiant enrolled bank customers in identity protection add-on products that promised to monitor consumers’ credit and alert them to potentially fraudulent activity, going back at least to 2003.
U.S. Bank customers, however, were charged for these products as soon as they enrolled, before necessary authorization to perform the services was granted, leading to a charge of unfair billing practices.
U.S. Bank terminated its relationship with Affinion in 2012.
In June 2012, Capital One Financial was fined in the bureau’s first public action over deceptive marketing tactics for add-on products at least partially marketed through Affinion.
Affinion and Trilegiant were also involved in Bank of America’s $772 million settlement in April with the CFPB, also levied over marketing and billing practices for add-on products.
As part of the order, U.S. Bank must improve its oversight of third-party vendors and submit a third-party management program plan for add-on consumer products to the OCC.
“Today’s action will provide $48 million in relief to U.S. Bank customers who were illegally charged for identity protection services they did not receive,” said CFPB Director Richard Cordray. “We have consistently warned companies about practices related to add-on products and we will do what is necessary to prevent further harm to consumers.”
