On February 4, 2015, the CFPB announced that it had entered a consent order with a Delaware-based subprime credit card company and servicer concerning allegations that the company made false statements and charged illegal fees for credit cards in violation of the Truth in Lending Act. The company purportedly charged consumers monthly maintenance fees, a setup fee, and fees for paper statements, which collectively violated the maximum percentage fee allowable to charge consumers based on their credit limit. In addition, the company purportedly made false representations that security deposits were FDIC insured. As part of the consent order, the company agreed to disgorge repay approximately $2.7 million to 98,000 consumers that were charged the illegal fees, pay a civil penalty of $250,000, and remained subject to ongoing CFPB supervisory authority.
Blog Enforcement Watch February 04, 2015