Washington, Aug. 25, 2016 — The Consumer Financial Protection Bureau (CFPB) has ordered First National Bank of Omaha to provide $27.75 million in relief to roughly 257,000 consumers harmed by illegal practices with credit card add-on products. The bank used deceptive marketing to lure consumers into debt cancellation add-on products and it charged consumers for credit monitoring services they did not receive. First National Bank of Omaha will also pay a $4.5 million civil money penalty to the CFPB.
“First National Bank of Omaha violated the trust of its customers by illegally signing them up for credit card add-on products,” said CFPB Director Richard Cordray. "The CFPB's track record, and this result today, shows strong and consistent action against credit card companies that dupe consumers into buying a product they do not want."
First National Bank of Omaha is headquartered in Omaha, Neb. As of March 31, 2016, the bank had approximately $18.4 billion in total assets. From 2002 until at least 2012, the bank offered add-on debt cancellation products with its credit card, including “Secure Credit” and “Payment Protection.” The bank promoted these products as providing a monthly payment to the cardholder’s account in the event of certain hardships like involuntary unemployment, hospitalization, or disability. Cardholders were charged a monthly fee. The bank also offered credit monitoring products, including “Privacy Guard” and “IdentitySecure” to monitor a cardholder’s credit for potential identity theft or fraud and to provide consumers with copies of their credit reports.
Today’s order covers the bank’s unfair billing practices from 1997 to 2012, and the bank’s deceptive enrollment practices from 2010 to 2012, when the practices stopped after a CFPB supervisory exam. The Bureau found the bank deceptively marketed the debt cancellation add-on products to consumers and it found illegal billing for credit monitoring services that consumers did not receive. Specifically, the bank:
Enforcement Action
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions engaging in unfair, deceptive, or abusive practices. The CFPB’s order requires that First National Bank of Omaha:
This enforcement action is the result of the CFPB’s investigation into First National Bank of Omaha credit card add-on products conducted in coordination with the Office of the Comptroller of the Currency (OCC). The OCC is separately ordering restitution and a $3 million civil money penalty for the unfair billing practices. This is the eighth action the Bureau has taken in coordination with another regulator to address illegal practices with respect to credit card add-on products and the 12th action the Bureau has taken in total to address these practices.
The full text of the CFPB’s Consent Order is available at: files.consumerfinance.gov/f/documents/082016_cfpb_FNBOconsentorder.pdf .
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov .
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