Consumers Paid For, But Never Got, Credit Card 'Add-On' Products, CFPB Says

The U.S. Consumer Financial Protection Bureau has issued consent orders naming two credit card “add-on product” providers and alleging that they deceived customers.
The two entities — Affinion Group Holdings and Intersections – allegedly charged consumers for credit card add-on benefits they did not receive. Credit card companies, sometimes via third-party vendors, often offer their customers “add-on” services such as “credit monitoring” or “identity theft protection” for a monthly or annual membership fee.

Under the proposed consent orders, Affinion would pay about $6.8 million to compensate eligible consumers who have not yet received refunds, and $1.9 million in civil money penalties. Intersections would pay about $55,000 in monetary relief to eligible consumers who have not yet received refunds and $1.2 million in civil money penalties.
“Consumers have every right to get what they pay for,” said CFPB Director Richard Cordray. “But we are still finding that thousands of consumers paid for add-on benefits they were promised but never received. We continue to address unlawful conduct in this space and are signaling to other financial institutions and their service providers that their marketing and billing practices must be fair to consumers.”
These add-on products are usually sold either by the bank itself or through a third-party vendor authorized by the bank to sell the product. Affinion and Intersections, both vendors of these types of products, partnered with banks to provide these products to credit card holders and other bank customers. The CFPB’s investigations revealed that Affinion and Intersections engaged in unfair practices related to the billing or administration of these products. That’s a violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).
Here are summaries of the allegations against the two companies:
Affinion Group Holdings (and affiliated companies Watchguard Registration Services and Global Protection Solutions)
The CFPB’s complaint alleges that — from about July 2010 through August 2012 — Affinion enrolled consumers in add-on products that claimed to provide consumers with benefits including credit monitoring, credit report retrieval, or both. Consumers generally paid between $6.95 and $15.99 per month for these products, which were typically billed directly to their credit cards or deposit accounts. The Bureau alleges, however, that Affinion or its partner banks billed full product fees to at least 73,000 accounts while failing to provide the full credit monitoring or credit report retrieval services promised, and failed to refund fees to those consumers.


Intersections, a Delaware corporation based in Virginia, provided credit monitoring and identity theft products to consumers primarily through arrangements with about 35 bank clients. The CFPB alleges that from 2009 through early 2013, Intersections marketed and sold add-on products to consumers, promising them access to their credit reports and a credit score, email, or phone alerts when new credit accounts were opened, and access to a phone representative to respond to their credit report questions. Consumers generally paid between $8 and $13 per month for these products, which were typically billed directly to their credit cards.
Here are the consent orders for Affinion and Intersections.

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