The Consumer Financial Protection Bureau (CFPB) ordered Continental Finance Company LLC, a subprime credit card company based in Delaware, to refund an estimated $2.7 million to approximately 98,000 consumers who were charged illegal credit card fees.
According to the consent order, a credit union, which was not fined, contracted with Continental to issue fee harvesting credit cards.
The consent order notes that from at least April 2012 through December 2013, Continental contracted with a privately insured Illinois credit union for the credit union to issue credit cards on the Discover network: the Cerulean Card, the Matrix Card, and the Verve Card.
While the consent order does not name the credit union,my June 14, 2013 blog post identified the credit union as Services Credit Union in Naperville, Illinois.
Between approximately April 2012 and July 2013, over 290,000 cards were issued.
Under the agreements, the credit union issued the cards and immediately assigned the receivables to Continental for funding and servicing.
Once the credit union assigned its rights, Continental serviced the accounts from billing to collections, advanced all funds to consumers, and received all fees assessed pursuant to the cardholder agreements.
In approximately December 2013, the credit union terminated its sponsorship agreement with Continental. The credit union has not issued any additional Continental Cards since approximately July 2013.
What is missing from the consent order is how much this credit union was paid by Continental.
Read the consent order.
Read the press release.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment