Are you a Capital One cardholder? Read this..American Express to Pay $85M to 250K Consumers

Another great article. If you are a Capital One cardholder, you should definitely read this article.

Capital One to Refund $140 Million to Cardholders

By LaToya Irby, About.com GuideJuly 20, 2012

The Consumer Financial Protection Bureau has ordered Capital One to refund $140 million to approximately two million cardholders after the card issuer deceived customers into purchasing certain add-on services, like payment protection plans and credit monitoring.

Current and former Capital One customers who initially enrolled in one of the add-on services on or after August 1, 2010 or who unsuccessfully tried to cancel after August 1, 2010 will receive a refund of all fees plus interest. Current cardholders will receive the refund as a credit to their credit card account. Former cardholders will receive a check in the mail.

Watch Out for Phishing Scams

The CFPB warns of scams related to the refund. Scammers may ask for personal information or tell you to send money to receive your refund. The refund is automatic. If you're entitled to a refund, you won't have to do anything to receive funds.

Always remember not to give out personal information on a call you didn't initiate to a number you've confirmed belong to your card issuer. Never give out personal information via email or a website you landed on from an email click. Instead, log in to your account by typing the company's URL directly into your internet browser.

What Capital One Did Wrong

Capital One isn't being penalized for simply selling or suggesting payment protection plans and credit monitoring services. It's the way the company's customer service reps sold services that got them in trouble with CFPB.

According to the CFPB, Capital One misled customers about the benefits of the services, failed to inform customers that the services were optional, failed to inform certain consumers they were ineligible to receive benefits of the services, misled to think the services were free, and enrolled without consent.

In addition, Capital One made it difficult and impossible for some cardholders to cancel services.

Other Penalties

In addition to the $140 million penalty, Capital One is required to pay a $25 million penalty to the CFPB. The card issuer is also not allowed to market these products until they submit an acceptable compliance plan to the Bureau.

Source:

http://credit.about.com/b/2012/07/20/capital-one-to-refund-140-million-to-cardholders.htm

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Are you an Amex Card Holder? Read this..American Express to Pay $85M to 250K Consumers

This is a great article. If you are an American Express cardholder, you should definitely read this article.

American Express to Pay $85M to 250K Consumers

By LaToya Irby, About.com Guide

The Consumer Financial Protection Bureau means business. After ordering Capital One to refund $140 million to consumers and Discover to refund $200 million, the CFPB has ordered American Express subsidiaries to refund $85 million to approximately 250,000 consumers.

American Express is considered to be one of the most prestigious credit card issuers. While their settlement involves lower dollar amounts and fewer consumers, the charges seem a lot more severe.

The Bureau decided American Express did several things wrong over the span of several years.

American Express subsidiaries promised a $300 reward to some consumers who signed up for the American Express Blue Sky credit card. However, the bank failed to give the $300 bonus. The CFPB requires this bonus to be paid to eligible cardholders.

In some cases, consumers were charged a late fee above the legal maximum of $25 ($35 if late two times in six-month period). CFPB is requiring American Express to reimburse the late fees plus interest.

They also violated the Equal Credit Opportunity Act by using age as a factor in a credit scoring system but failing to apply the system to applicants over age 35.

American Express subsidiaries led some consumers to believe they could improve their credit by paying old debts when the accounts were actually beyond the credit reporting time limit, which is seven years for most kinds of debt. Your credit score isn't influenced by paying debts that are no longer being reported. The CFPB now requires American Express to notify consumers when they're collecting a debt that is too old to be reported to a credit bureau.

Some consumers were told they could accept a settlement offer and have their debt forgiven. However, the debts were not actually forgiven and consumers were later denied an American Express card because of it. To these consumers, American Express has to pay $100 and send a pre-approved credit card offer. Consumers who already paid a settlement to receive a credit card will receive a refund of that debt paid plus interest.

American Express will also have to pay $27.5 in penalty fees to the CFPB, the FDIC, the Federal Reserve, and the Office of the Comptroller of the Currency.

If you are eligible for a refund, you don't have to do anything. The refund will be made automatically as a credit to your existing American Express account or a check mailed to you.

From the time you miss your first credit card payment, you trigger a series of actions that could be hard to stop. If you think you're having a hard time making your payments now, wait until you're three or four months past due. It might be impossible to catch up then.

Here's what you can expect to happen When You Stop Making Credit Card Payments. As you read through the list, you won't see anything good and it might be worse than you expected.

If you foresee trouble making your credit card payments, explore your options before your due date passes. Once you're past due, some options disappear. For example, you won't qualify for a low interest rate balance transfer once a late payment shows up on your credit report.

Source:

http://credit.about.com/b/2012/10/04/ditched-credit-card-payments.htm

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Resources to financial wealthness

You May Be Paying Too Much for Your Mortgage
Tips to help consumers get the best mortgage product for which they qualify

Tools of the Trade: A Basic Guide to Financial Derivatives
Insight into when and how derivatives can be valuable tools for managing financial risk

Phishing and Pharming: Helping Consumers Avoid Internet Fraud
Information about the increasingly prevalent and sophisticated fraudulent access to personal information over the Internet

Pathways to Getting Ahead
Information for young adults about the importance of asset building in their personal lives and about how larger policy decisions impact the choices they make

The Consumer Financial Emergency Survival Kit
Basic helpful guidance and resources on a broad range of consumer financial topics

updated in May 2012

Identity Theft
What identity theft is, how it happens, how to protect yourself, and what steps to take if your identity is stolen (companion video, Identity Theft: Protect Yourself )

Know Before You Go... To Choose or Use a Credit Card: A Guide to Credit Cards and a Glossary of Terms

Know Before You Go... To Get a Mortgage: A Guide to Mortgage Products and a Glossary of Lending Terms

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