WASHINGTON–The CFPB has taken action against two credit card add-on product vendors – Affinion Group Holdings, Inc., Affinion’s affiliated companies, and Intersections Inc. – for unfairly charging consumers for credit card add-on benefits they did not receive.
Under the proposed consent orders, Affinion would pay approximately $6.8 million in monetary relief for eligible consumers who have not yet received refunds and $1.9 million in civil money penalties, while Intersections would pay approximately $55,000 in monetary relief to eligible consumers who have not yet received refunds and $1.2 million in civil money penalties.
“Consumers have every right to get what they pay for,” said CFPB Director Richard Cordray. “But we are still finding that thousands of consumers paid for add-on benefits they were promised but never received. We continue to address unlawful conduct in this space and are signaling to other financial institutions and their service providers that their marketing and billing practices must be fair to consumers.”
According to the CFPB, credit card companies often offer their customers “add-on” services such as “credit monitoring” or “identity theft protection” for a monthly or annual membership fee. The add-on products are usually sold either by the bank itself or through a third-party vendor authorized by the bank to sell the product. Affinion and Intersections, both vendors of these types of products, partnered with banks to provide these products to credit card holders and other bank customers. The CFPB said its investigation revealed that Affinion and Intersections engaged in unfair practices related to the billing or administration of these products in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).