Manatt Advertising Chair Quoted on First CFPB Enforcement Action
"Trading Off Regulatory Misfortune: Street Whispers"The Street
July 27, 2012 - The Street interviewed Manatt's Linda Goldstein, chair of the firm's Advertising, Marketing & Media Division, on the Consumer Financial Protection Bureau's (CFPB's) first regulator enforcement action.
The Street reports that on July 18 CFPB, a one-year-old government agency within the Federal Reserve, ordered Capital One to refund $140 million to two million credit card customers and pay an additional fine of $25 million for failing to properly monitor third party vendors' sales of additional services to customers, such as "credit protection" and "credit monitoring" services. The order is precedent-setting, as it is the first regulator enforcement action the Bureau has issued.
"It is a huge amount of money," said Goldstein, adding that the CFPB's agreement with Capital One suggests "on its face that the Bureau was not willing to engage in much negotiation on consumer redress."
Goldstein also noted that "we're going to see more of this for sure," and that "any financial institution marketing these services wants to take a hard look at complaint rates, charge-back rates, the marketing materials and putting an affirmative monitoring program in place."
Read the article here.
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