GE Capital ordered to pay quarter of a billion dollars

Jun 20, 2014

GE Capital ordered to pay quarter of a billion dollars

Jun 20, 2014

The Consumer Financial Protection Bureau has announced the largest federal credit card settlement over discrimination in U.S. history. GE Capital Retail Bank, now known as Synchrony Financial, was ordered to pay $228.5 million in refunds to customers.

The CFPB says the bank told credit card customers certain services were free when they were not; signing people up and charging them without their consent, and even charging people who weren’t eligible to receive the service.

The largest chunk of the settlement ($169 million) is over allegations GE Capital Retail Bank declined to offer debt relief to people if they asked for service in Spanish, or if they had mailing addresses in Puerto Rico.

“These kinds of practices are amazingly common,” says Jill Fisch, professor of law at the University of Pennsylvania. “Historically credit cards have been an area where the credit card companies are able to identify lower income and less educated consumers and take advantage of them and we’ve seen that over many years.”

GE Capital self-reported the incidents and says it regrets its error. In April, Bank of America paid $727 million over similar practices, and over the past two years American Express, Capital One, Chase, and Discover have all been ordered to refund customers more than $700 million dollars total. 

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.