Capital One Offers Refunds Over Sales Tactics

Date : 04/19/2012 @ 7:19PM
Source : Dow Jones News
Stock : Capital One Financial Corp. (COF)
Quote : 80.34  0.71 (0.89%) @ 4:00PM

Capital One Offers Refunds Over Sales Tactics

Capital One (NYSE:COF)
Historical Stock Chart

5 Years : From May 2012 to May 2017

Click Here for more Capital One Charts.

Capital One Financial Corp. (COF) is setting aside $75 million for customer refunds stemming from employees who violated company policy when selling products to credit cardholders over the phone, its top executive said Thursday.

Richard Fairbank, chairman and chief executive of Capital One, said it is offering refunds to customers who bought certain products "over the past couple of years." Some sales employees "didn't adhere to our scripts and sales policy when cross selling products to our credit-card customers," Fairbank told analysts during an earnings conference call.

Fairbank didn't say how many customers would be offered refunds, how the employees in question violated company policy or when the violation occurred. A Capital One spokeswoman didn't immediately return a call for comment Thursday night.

The policies and scripts are in "place to ensure that our sales practices meet our standards and unfortunately this didn't happen in some cases," Fairbank said. "It's very important that we make sure that all of our customers have bought the products in the context that we exactly intended when we were selling."

Capital One is the fifth-largest credit-card issuer in the U.S. by spending, according to the Nilson Report, a payments-industry newsletter.

Credit-card issuers have been hit with lawsuits in recent years over the sale of add-on services including identity-theft monitoring, payment protection, which is advertised as a way to help consumers in the event of a job loss or other hardship event, and other products. Such services typically carry monthly fees.

The state of Hawaii last week said it filed lawsuits against seven credit-card lenders, alleging they enrolled customers in such services without their permission or used misleading sales tactics when pitching the products over the phone. The seven issuers are Bank of America Corp. (BAC), Barclays PLC (BARC.LN) Capital One, J.P. Morgan Chase & Co. (JPM), Citigroup Inc. (C), Discover Financial Services (DFS) and HSBC Holdings PLC (HBC). Capital One is acquiring HSBC's U.S. credit-card business.

Discover has disclosed a probe by the Federal Deposit Insurance Corp. and Consumer Financial Protection Bureau over its marketing of payment protection and other fee-based services. The regulators are likely to take a joint enforcement action against the credit-card issuer, the cost of which could exceed $100 million, Discover said in January.

Capital One's shares were up 1.6% at $54.77 in after-hours trading after reporting strong first-quarter earnings.

-By Andrew R. Johnson, Dow Jones Newswires; 212-416-3214; andrew.r.johnson@dowjones.com

Latest COF Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....


No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts


Your Recent History
LSE
GKP
Gulf Keyst..
LSE
QPP
Quindell
FTSE
UKX
FTSE 100
LSE
IOF
Iofina
FX
GBPUSD
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.


NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.