Credit company to pay $12 million to troops for violating Civil Relief Act

Credit company to pay $12 million to troops for violating Civil Relief Act
By ERIK SLAVIN
Stars and Stripes
Published: July 30, 2012

YOKOSUKA NAVAL BASE, Japan — Capital One will pay $12 million to servicemembers and their families to settle claims that it violated the Servicemembers Civil Relief Act, according to documents filed in federal court Thursday.

The bank and credit card issuer unlawfully foreclosed on homes, repossessed property and charged servicemembers at interest rates beyond the maximum 6 percent rate they were entitled to under the act, according to a settlement agreement with the Justice Department filed in Alexandria, Va.

The agreement sets aside $7 million for servicemembers who unlawfully lost their homes during foreclosure proceedings with Capital One or either of two acquired subsidiaries, ING Direct USA and HSBC Holdings.

An additional $5 million will go to servicemembers who did not receive correct interest rates or other benefits on credit card accounts and loans.

“Servicemembers will be identified and compensated, with no action required on their part, on accounts dating back to July 15, 2006,” according to a Justice Department statement.
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