Consumer Finance Insights
August 29, 2016

OCC and Bank Reach $3 Million Settlement Over Alleged Unfair Billing Practices

On August 25, 2016, the Office of the Comptroller of the Currency (OCC) announced that it had agreed to consent orders with a national bank based on its alleged unfair billing practices. The civil money penalty order will require that the bank pay a $3 million civil money penalty.  The cease and desist order requires the bank to make restitution to consumers who were billed and paid for identity theft protection that they did not receive.

The consent orders state that the OCC determined that the bank’s billing practices violated Section 5 of the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 45(a)(1), which prohibits unfair and deceptive trade practices.  The restitution mandated by the order covers consumers who enrolled or paid for identity theft protection products offered by the bank between 1997 and 2013, but did not receive the full benefit of the products.  It is to include the full amount paid as well as any fees or charges associated with the product.  The bank will also be required to improve its governance of third-party vendors that provide consumer services on the bank’s behalf.

The OCC coordinated with the Consumer Financial Protection Bureau (CFPB), which issued a separate order on the same day assessing $32.25 million in damages and penalties against the bank.  Additional information regarding the CFPB’s order can be found in a related post from the Consumer Finance Enforcement Watch.