Bank of Omaha to Pay $32.35 Million to Settle CFPB Charges

The Consumer Financial Protection Bureau (CFPB) has ordered First National Bank of Omaha to provide $27.75 million in relief to roughly 257,000 consumers harmed by illegal practices with credit card add-on products.


The bank used deceptive marketing to lure consumers into debt cancellation add-on products and it charged consumers for credit monitoring services they did not receive. First National Bank of Omaha will also pay a $4.5 million civil money penalty to the CFPB.

“First National Bank of Omaha violated the trust of its customers by illegally signing them up for credit card add-on products,” said CFPB Director Richard Cordray. “The CFPB’s track record, and this result today, shows strong and consistent action against credit card companies that dupe consumers into buying a product they do not want.”

First National Bank of Omaha is headquartered in Omaha, Neb.

As of March 31, 2016, the bank had approximately $18.4 billion in total assets.

From 2002 until at least 2012, the bank offered add-on debt cancellation products with its credit card, including “Secure Credit” and “Payment Protection.”

The bank promoted these products as providing a monthly payment to the cardholder’s account in the event of certain hardships like involuntary unemployment, hospitalization, or disability. Cardholders were charged a monthly fee.

The bank also offered credit monitoring products, including “Privacy Guard” and “IdentitySecure” to monitor a cardholder’s credit for potential identity theft or fraud and to provide consumers with copies of their credit reports.

The CFPB  order covers the bank’s unfair billing practices from 1997 to 2012, and the bank’s deceptive enrollment practices from 2010 to 2012, when the practices stopped after a CFPB supervisory exam.

The Bureau found the bank deceptively marketed the debt cancellation add-on products to consumers and it found illegal billing for credit monitoring services that consumers did not receive.

The bank forced consumers to listen to their sales pitches about debt cancellation products by implying that they had to stay on the phone while their cards were activating. In reality, the card activation process was nearly instantaneous and consumers did not have to stay on the line and listen to the pitch to have their cards activated.

The bank distracted consumers into making a purchase. The bank led some consumers to believe they would not have to pay for the debt cancellation products. For example, the bank confirmed enrollment by asking for the consumer’s city of birth, not by asking if the consumer wanted the product. In other cases, the bank did not make it clear that consumers were making a purchase.

For example, they made it seem like they were receiving a benefit, updating their accounts, or that the consumer was merely agreeing to receive more information about the product.

The bank also failed to disclose consumers’ ineligibility.

When marketing the debt cancellation products, the bank told some consumers they were eligible for the product even when the consumers had disclosed information suggesting they would be ineligible for some product benefits, such as that they were retired, self-employed or employed for less than 30 hours a week.


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