(Bloomberg) -- Capital One Financial Corp., the third-biggest issuer of Visa credit cards, will reimburse customers a total of $775,000 for charging annual credit-card membership fees after borrowers asked to close their accounts, regulators said today.
The McLean, Virginia-based company will pay customers who closed their accounts from 2004 to 2006 and were assessed membership fees on accounts with no outstanding balances, as part of an agreement with the Office of the Comptroller of the Currency, according to a press release from the OCC.
“This problem was the result of a systems issue that we fixed in 2006,” said Tatiana Stead, a spokeswoman for Capital One. “At the time, we refunded membership fees for many customers who contacted us directly but, in retrospect, we should have done so for an additional 3,400 customers.” Capital One said it couldn’t provide average fees paid by customers because they varied by product.
Capital One is going beyond the legal requirements and refunding membership fees for an additional 15,000 customers who paid their balances within 90 days of requesting their accounts be closed, Stead said.
The card issuer reported fourth-quarter net income of $376 million, or 83 cents a share, compared with a loss of $1.45 billion, or $3.74, in the year-earlier period. Capital One’s shares rose 48 cents, or 1.3 percent, to $37.33 at 4:15 p.m. in New York Stock Exchange composite trading.
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