HSBC Bank USA Fined $35 Million Due to Credit Card... - Legal News


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Credit Card Applications » News » Legal » HSBC Bank USA Fined $35 Million Due to Credit Card Add-ons

HSBC Bank USA Fined $35 Million Due to Credit Card Add-ons

The content is accurate at the time of publication and is subject to change.

HSBC Bank USA will be forking over $35 million in fines to the Office of the Comptroller of the Currency (OCC) and refunding fees directly to cardholders who purchased certain credit card add-ons, which they never actually received. The add-ons included CreditKeeper, a credit monitoring service.

During the investigation the OCC found that HSBC Bank USA was in violation of Section 5 of the Federal Trade Commission (FTC) Act, prohibiting unfair and deceptive acts or practices. The add-on services were charged to the accounts serviced by both HSBC Bank USA and HSBC Bank Nevada, N.A., which at one time was a subsidiary of HSBC Finance Corporation. The $35 million in fines are a direct result of a wide range of factors, including how long people were charged and the number of people affected. They will pay the fine directly to the U.S Treasury.

Making it right with customers

People who signed up for the add-on services and paid for them between January 2004 and May 2012, but did not get the services are now eligible for a refund of all fees.

HSBC is now working out a restitution system to pay back these fees. The refunds not only include all the fees paid to HSBC, but any additional fees that customers may have incurred as a result, including over-limit fees, finance charges, and interest.

More than just paying fines and making refunds

As a part of this agreement with the OCC, HSBC is also required to make sure they are in total compliance with the FTC Act, and make any changes to ensure that is the case. They are also required to improve their administration of vendors who manage the add-on packages, whether they are security related or for some other aspect of service. HSBC is also mandated to create a risk management program especially designed for add-on consumer products which they sell.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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