In the largest decision of its kind, the Consumer Financial Protection Bureau has ordered GE Capital Bank Thursday to pay an estimated $225 million to consumers “harmed by illegal and discriminatory credit card practices.”
The settlement resolves allegations that the bank intentionally excluded minority borrowers of Hispanic descent from two of its credit-card debt repayment programs. Of the total settlement, the bulk of funds – $169 million – will go to the 108,000 borrowers who were unable to receive debt relief because of their national origin.
“Today’s action will provide $225 million in relief to GE Capital credit card customers who were harmed by deceptive marketing or discrimination. We will continue to take action against marketing tactics that trick consumers into buying credit card products they do not want or cannot use. Consumers also deserve to be treated fairly no matter where they live or what language they speak,” said CFPB Director Richard Cordray in a released statement.
Cordray also called the discrimination in this case “blatant” and “unlawful.”
GE Capital changed its name to Synchrony Bank on June 2, 2014.
Synchrony Bank is also ordered to pay $56 million to approximately 638,000 consumers for deceptive marketing practices. Those practices included not disclosing fees associated with services, not informing users on the limitations of those services, lying about the breadth of service and on the whole misleading the consumer into paying for features that were redundant or not applicable to them.
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