Security & Fraud

HSBC Settles Legacy Credit Cards Case

HSBC Bank USA has reached an agreement to pay $35 million as part of a settlement with the Office of the Comptroller of the Currency.

The settlement, according to a press release on Wednesday (April 13), resolves a regulatory review of billing practices tied to credit add-ons sold to HSBC Bank Nevada customers. HSBC Bank Nevada was a former unit of HSBC Finance Corp. (which is paying most of the aforementioned fine).

The company said that it discontinued sales of credit card add-on products four years ago and also sold its card and its retail services business in 2012, while the HSBC Bank Nevada unit was shuttered in 2013.

As part of the settlement, there will be refunds of product fees and other charges — restitution for customers that were affected by the add-on sales. There are not likely to be any additional charges to HSBC Finance Corp.’s income statement. Charges were recorded in prior years.

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