Capital One repays consumers to end card probe

 

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Capital One Financial said Wednesday that its subsidiary bank, Capital One Bank, fully cooperated with regulators and had reached agreements with both agencies.

Capital One's third-party vendors between August 2010 and January 2012 did not always adhere to the company's sales scripts, and the bank did not adequately monitor vendors' activities, the bank said.

"These marketing calls were inconsistent with the explicit instructions we provided to agents for how these products should be sold," Ryan Schneider, president of Capital One's card business, said in the company's statement.

The company said it first learned of the breakdowns late last year. Capital One said it immediately stopped the phone sales and began efforts to try to identify customers to provide full refunds.

Capital One merged with ING Direct last year over the objections of consumer groups, which said Capital One should not become the fifth-biggest bank because of a poor record with consumers. The National Community Reinvestment Coalition specifically objected to Capital One's use of "payment protection" and asked that it be referred to the CFPB.

When the Federal Reserve allowed the deal, it ordered Capital One to improve internal controls around its lending and debt-collection operations.

Capital One paid more than $200,000 to Britain's top financial regulator in 2007 for misleading marketing of payment protection, according to news reports at the time.

Stock of the parent company, Capital One Financial, fell 84 cents, or 2%, to $54.99 Wednesday.

Contributing: Associated Press reports