OMAHA, Neb. (AP) — More than three years after agreeing to
pay nearly $10.4 million for charging improper fees, the credit-card
bank operated by outdoor retailer Cabela’s has been fined $1 million by
banking regulators and ordered to pay cardholders restitution for
deceptive and unfair acts.
The Federal Deposit Insurance Corp.
posted an enforcement order to its website Friday showing that
Lincoln-based World’s Foremost Bank agreed to the sanctions, but did not
admit or deny the violations. The bank is the credit-card arm of
Sidney, Neb.-based Cabela’s.
"We at World’s Foremost Bank
recognize we are operating in a dynamic and evolving regulatory
environment and it is our responsibility to meet these expectations,"
bank CEO Sean Baker said in a written statement. "As such, we
immediately addressed the FDIC’s concerns and remain committed to
providing legendary customer service to our cardholders, as we have
throughout our history."
In March 2011, Cabela’s agreed to pay
nearly $10.4 million and reform its credit card practices as part of a
settlement with the FDIC over assessing improper fees and other customer
issues.
In the order released Friday, the FDIC said World’s
Foremost Bank must refund certain interest charges to cardholders and to
repay others for credit card add-on services, such as identity-theft
protection.
The restitution will include:
— Refunds of all
interest paid before the end of a 12-month interest-free period for
cardholders who participated in zero-percent interest promotions.
—
Refunds of premiums paid for LifeLock identity-theft protection by the
905 cardholders enrolled at the Fort Worth, Texas, Cabela’s store
between October and December 2012. The bank must also inform customers
that enrollment in LifeLock is not a requirement for having a Cabela’s
Club Visa card.
— Provide points redeemable for merchandise to
cardholders whose credit-card bills were covered by a plan that pays
outstanding amounts when the customer cannot.
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