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First National Bank of Omaha's Telemarketing and Compliance Practices Under Fire by the CFPB

The CFPB today announced a consent order with the First National Bank of Omaha for deceptive marketing and illegal billing of credit card add-on products. The regulatory agency ordered the bank to repay a hefty $27.75 million to affected consumers and pay a $4.5 million civil money penalty to the CFPB.

If these numbers are hard to swallow, it’s time to take a close, hard look at your company’s telemarketing compliance practices and ensure they don’t get you in deep water too.

The First National Bank of Omaha first got on the CFPB’s radar in 2012 when the regulatory agency carried out a supervisory exam of the bank’s marketing practices. As the CFPB found, the bank had multiple instances of misrepresenting their debt cancellation products during inbound and outbound telemarketing calls. 

In some instances, the bank’s telemarketers tricked consumers into making a purchase by making it seem like they were receiving a free benefit or free information about the product. In other instances, the bank failed to disclose consumers’ ineligibility for a certain product benefit.

Not only did the CFPB call out the bank’s marketing practices, but the CFPB’s consent order specifically noted the bank’s lack of compliance oversight:

4.20. Respondent’s compliance monitoring, Service Provider management, and quality assurance resulted in ineffective oversight, which failed to prevent, identify, or correct these unfair or deceptive acts or practices. (Emphasis added)

Through this enforcement action, the CFPB makes it clear that they expect consumer finance institutions to have an effective compliance monitoring solution in place to prevent harmful practices. Companies engaging in telemarketing need to monitor their telemarketers’ calls for unfair, deceptive, and abusive practices (UDAAPs) and correct any potential violations immediately.

If your company does not have an effective contact center monitoring solution in place, we’re here to help you out. Learn how our PerformMatch platform helps contact centers comply with federal and state regulations and protect their brand.

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Tags: Regulatory Compliance

Understanding and complying with UDAAP policy can be a challenge

Download this guide to learn what every company should know to reduce exposure to Unfair, Deceptive or Abusive Acts and Practices (UDAAPs) and other common compliance violations.

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