The Consumer Financial Protection Bureau announced yesterday that a subprime credit card issuer will refund $2.7 million to customers and pay a $250,000 fine for charging customers illegal fees, PYMNTS.com reported today. The CFPB said that Continental Finance Co. LLC, a card issuer headquartered in Newark, Del., issued subprime credit cards that typically had a $300 credit limit, which meant the maximum Continental could charge customers in fees during the first year was $75, or 25 percent of the credit line, a limit set by the 2009 Credit Card Accountability, Responsibility and Disclosure (CARD) Act. But Continental required an upfront fee of $75 and then charged some cardholders additional fees that exceeded the CARD Act limit. Approximately 98,000 customers were hit with those illegal fees, usually because they were charged a monthly $4.95 fee for receiving paper billing.
