On September 13, the CFPB filed a complaint in the U.S. District Court for the Western District of Pennsylvania against a credit card company and its CEO. The CFPB alleged the company engaged in deceptive and abusive practices, violating the CFPA and TILA. The CFPB accused the company of misleading consumers by advertising a general-purpose credit card and charging substantial mandatory fees to access what it alleged was in fact a membership program for a credit card that could be used only to make purchases from the company’s online store or for purchasing ancillary products that had limited value and were rarely used by consumers. The Bureau stated that membership fees at issue exceeded the legal limits set by TILA, sometimes amounting to 60 percent of the consumer’s credit limit.

The CFPB complaint levied five counts against the defendants: (i) the company and its CEO engaged in deceptive acts by falsely representing its credit card and the ease of canceling memberships and obtaining refunds; (ii) the company and its CEO’s practices were abusive, making it unreasonably difficult for consumers to cancel their memberships and obtain refunds; (iii) through his control of the company and its operations, the CEO knowingly or recklessly provided substantial assistance in connection with the company’s deceptive and abusive acts and practices; (iv) the company violated TILA and Regulation Z by charging excessive fees; and (v) the alleged TILA violations also constitute violations of the CFPA.