1. GE Capital will pay $169 million to about 108,000 Hispanic borrowers to settle perhaps the largest credit card discrimination suit in history. The company will pay an additional $56 million to resolve accusations that it tricked customers into buying products they didn’t intend to buy, and it will pay a $3.5 million civil penalty.
The Consumer Financial Protection Bureau (CFPB) estimates 108,000 Hispanic consumers faced discrimination when they were excluded from two debt-relief offers without their knowledge. CFPB also estimates 638,000 consumers were affected by deceptive marketing practices.
The Bureau said GE Capital excluded customers who indicated they preferred to communicate in Spanish and those with mailing addresses in Puerto Rico from certain debt-relief promotions, even if those customers were eligible.
That was a violation of the Equal Credit Opportunity Act. In addition, telemarketers failed to disclose to consumers when they were ineligible for a product, and allowed them to purchase it anyway. They also falsely advertised certain promotions as limited-time offers.
GE Capital was ordered to pay $56 million to those affected. This is also the sixth time CFPB has taken action on practices surrounding credit card add-on products, resulting in $1.5 billion repaid to consumers.
2. The CFPB ordered New Jersey-based Stonebridge Title Services to pay $30,000 for paying illegal kickbacks for referrals. The Bureau charged that the company paid commissions to more than 20 independent salespeople who referred title insurance business to Stonebridge.
In doing so, the company violated Section 8 of the Real Estate Settlement Procedures Act and is required to pay a civil penalty. “Kickbacks drive up the costs of getting a mortgage and put law-abiding companies at a disadvantage,” said CFPB Director Richard Cordray.
“The Consumer Bureau will continue to take action against companies that seek to attract consumers through illegal schemes.”