October 4, 2012
Authored by: Bryan Cave
Concurrent with its enforcement action against Capital One, the CFPB issued a Bulletin on its expectations for the marketing of credit card add-on products, such as those at issue in the Capital One action. The Bulletin also warns institutions that the CFPB will take “all necessary steps to ensure that consumers are protected from deceptive sales and marketing practices, including those resulting from failures to adequately disclose important product terms and conditions, or other violations of Federal consumer financial law.” These include having a comprehensive compliance management program ensures that telemarketing and customer service scripts do not mislead or pressure consumers.
The Bulletin outlines a number of steps that CFPB-supervised institutions should take to ensure that they market and sell credit card add-on products in a way that limits the potential for statutory or regulatory violations and associated consumer harm. The Bulletin also lists a number of compliance management programs that should be employed by institutions offering credit card add-on products.
Although the Bulletin focuses on credit card add-on products, the CFPB notes that institutions should take this guidance into consideration when offering similar products in connection with other forms of credit or deposit services.
The Bulletin is available here.