A recent settlement between a number of the nation’s largest credit card lenders and the federal consumer watchdog agency tasked with protecting Americans’ finances could result in a payout for many borrowers in the near future, if it hasn’t already.
Customers of Discover, American Express and Capital One may soon receive checks from their lenders related to their having marketed various products related to their credit card accounts, according to a report from CNNMoney. In all, these lenders have until the end of March to pay some 6 million total customers back about $435 million. Current customers will receive credits on their accounts, and those who no longer have accounts with the lenders will receive checks in the mail.
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For instance, American Express will pay a total of $85 million to 250,000 or so customers who were hit with higher late fees than legally permissible, or who signed up for a certain credit card but did not receive an advertised $300 bonus, the report said. Further, Capital One will pay $150 million to about 2 million people as a result of third-party business partners marketing credit protection products for their accounts. Finally, Discover will pay more than $200 million to about 3.5 million cardholders who bought products similar to those marketed by Capital One.
The payout each consumer can expect varies by the lender and, in many cases, the terms of their personal agreements, the report said. For instance, Capital One says that the average borrower can expect a settlement of less than $100, but the exact amount each person will receive is based on how long they were enrolled in the service that resulted in the case with the Consumer Financial Protection Bureau to begin with.
Consumers who were affected by these questionable marketing practices don’t have to take any action to receive the payments, the report said. However, those who believe they should get some money from the settlement should first check with their lender, then contact the CFPB if there are any further problems.
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The CFPB has been cracking down on unfair and misleading practices in the lending industry since it gained full regulatory power more than a year ago, and that has resulted in numerous consumer protections being put in place.
Image: Sean McMenemy, via Flickr
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