“The blatant discrimination that occurred here (by GE Capital) is unlawful and will not be tolerated,” said Jocelyn Samuels, the acting assistant attorney general for the Civil Rights Division…This kind of conduct has no place in the consumer financial marketplace,” said Richard Cordray, the (Consumer Financial Protection Bureau’s) director. “People deserve to be given clear information and they deserve to be treated fairly.”, Los Angeles Times

“Isn’t this comparable to Donald Sterling (the infamous L.A. Clippers owner) settling with the government over alleged discriminatory practices as an apartment landlord? If this is in fact true, that GE mislead consumers and “blatantly discriminated” against Hispanic borrowers, why wouldn’t there be more accountability on the part of GE? $250 million is nothing for them. An apology and resignation from the CEO of GE Capital or GE itself might be in order and some loss of potential business…maybe with respect to federal government contracting for a time? GE’s CEO is over negotiating with the French government to buy Alstom. Maybe he should be home fixing his firms existing culture, policies, and practices? If it’s not true (and I suspect it is not based on my experience) then GE should not have settled (as “a cost of doing business”) and allowed top government officials to publicly “bad mouth” them. They should have acted like Americans and fought this matter (and for the truth) and if they don’t have the resources to fight this matter then no one does. And that is pretty scary, don’t you think? That even GE, with all its size and resources, doesn’t feel it can’t stand up and fight. Maybe this is what’s wrong with big government and big business (and our civil legal system)…what about the facts and the truth?”, Mike Perry, former Chairman and CEO, IndyMac Bank

GE Capital to refund $225 million to settle credit card allegations

By Jim Puzzanghera

GE Capital agreed to pay $225 million to about 750,000 customers to settle federal allegations of deceptive and discriminatory credit card practices, federal officials said.

People deserve to be given clear information and they deserve to be treated fairly.– Richard Cordray, director, Consumer Financial Protection Bureau

The claims included an accusation that the financial firm barred Latino customers from participating in two company debt-repayment programs, the officials said.

The company’s retail banking unit will provide about $169 million in refunds or credits to about 108,000 customers who were not told about the repayment programs because they indicated they preferred to receive communications in Spanish or had a mailing address in Puerto Rico, the Consumer Financial Protection Bureau and Justice Department said Thursday.

“The blatant discrimination that occurred here is unlawful and will not be tolerated,” said Jocelyn Samuels, the acting assistant attorney general for the Civil Rights Division.

The settlement was the largest in a credit-card discrimination case in the department’s history, she said. The practices, which took place from January 2009 to March 2012, violated the Equal Credit Opportunity Act.

Samuels said the bank, now called Synchrony Bank, discovered the discriminatory practices and alerted the consumer bureau, which regulates credit card issuers.

So far, the bank, which did not admit or deny the allegations, has provided $131.8 million of the settlement money to its customers.

Dori Abel, a spokeswoman for GE Capital’s retail banking unit said company employees worked cooperatively with federal officials after the problem was discovered.

“Our priority is treating our customers fairly,” she said.

GE Capital, a unit of General Electric Co., also agreed to refund $56 million to 638,000 credit card customers who were subjected to deceptive marketing for debt-related products.
Federal officials said the company’s telemarketers misrepresented the costs and terms of those add-on products, such as Account Security and Debt Security.

For example, customers were misled into believing the programs were free or they were incorrectly told they would not be charged for the service if they paid their credit card balance each month, federal officials said.

This kind of conduct has no place in the consumer financial marketplace,” said Richard Cordray, the consumer bureau’s director. “People deserve to be given clear information and they deserve to be treated fairly.”

In addition to the refunds, the bank will pay a $3.5-million civil penalty, Cordray said.

The bureau, created by the 2009 financial reform law, has been cracking down on banks for deceptive marketing of credit card add-on products. Since 2012, the bureau has obtained about $1.5 billion in refunds and $85 billion in fines for such cases.

Follow @JimPuzzanghera on Twitter

Copyright © 2014, Los Angeles Times

Posted on June 20, 2014, in Postings. Bookmark the permalink. Leave a comment.

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