Alert June 17, 2008

FDIC Seeks $200 Million From Credit Card Company and Two Banks for Deceptive Credit Card Marketing

The FDIC issued enforcement actions against CompuCredit Corporation and two FDIC-supervised banks for allegedly marketing subprime credit cards in violation of the Federal Trade Commission Act. The FDIC settled with a third bank also involved with CompuCredit.

The enforcement actions seek orders that would correct the FTC Act violations, and provide restitution to consumers in the form of credits for certain fees and charges arising from the alleged deceptive marketing practices. It is estimated that such credits will exceed $200 million. The restitution is being sought against CompuCredit, First Bank of Delaware and First Bank & Trust. The FDIC is also seeking civil money penalties of $6.2 million against CompuCredit, and a total of $431,000 against First Bank of Delaware and First Bank & Trust.

Separately, the FTC filed a parallel federal court action against CompuCredit.

Click here for a copy of the FDIC’s press release which contains links to the FDIC orders.