CFPB Asks Court To Shut Down Texas Company’s Deceptive, Illegal Credit Card Offer

Back in December, the Consumer Financial Protection Bureau filed a lawsuit against a Texas-based company that allegedly deceived consumers into paying fees to sign up for a sham credit card. The Bureau’s mission to shut down the company continued today when it asked a federal district court to make the company pay a $70,000 fine and permanently ban Union Workers Credit Services from offering any consumer credit products in the future.

The latest CFPB action [PDF] against Union Workers Credit Services comes after the company allegedly duped thousands of consumers into signing up for what was marketed as a general-use credit card, but in actuality was a buying-club membership card.

According to the CFPB’s original complaint [PDF], the vast majority of the company’s revenue is generated from selling the particularly useless buying-club membership card. And while most consumers never use the membership card, they cannot recoup their membership fees − $37 if they apply through the mail or $95 if they apply online.

Since it began offering the card in 2004, the Bureau estimates that Union Workers Credit Services has collected membership fees from hundreds of thousands of consumers throughout the United States, totaling millions of dollars.

On top of unfairly charging consumers fees for a card they can’t use, the CFPB accuses Union Workers Credit Services of deceptively implies in advertisements that it has an affiliation with unions by using pictures of nurses, firefighters, and other public servants, the CFPB alleges.

In all, thousands of consumers had filed complaints with law enforcement agencies and the Better Business Bureau about Union Workers Credit Services.

If approved by the court, today’s action would prohibit Union Workers Credit Services from offering any credit products or services, and from committing any future violations of federal consumer financial protection laws.

Consumers who were harmed by these violations may be eligible for relief from the CFPB’s Civil Penalty Fund in the future.

In addition to action by the CFPB, the company has been sued by multiple government authorities, including the New York State Attorney General and the U.S. Postal Service.

Consumer Financial Protection Bureau Takes Action To Shut Down Sham Credit Card [CFPB]