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CFPB Fines First National Bank of Omaha for Credit Card Add-On Products

The Consumer Financial Protection Bureau (CFPB) has ordered First National Bank of Omaha to provide US$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 US$4.5 million civil money penalty to the CFPB.

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. 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.

News Characteristics

Date : Aug 25, 2016
Region : North America
Industry : Banks
Function : Regulation and Compliance
Sub-Function : Fraud Management