(CN) - The Iron Workers Mid-South Pension Fund claims that Capital One, the nation's largest issuer of consumer credit and debit cards, "deceived" customers and enrolled them in "add-on" services without their consent.
Capital One was recently investigated by the both the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) which found that the credit card company violated sections 5 and 6 of the Federal Trade Commission Act.
Investors allege that the company's "egregious" failure to comply with federal and state law jeopardized its economic stability and profits. The company also faces numerous lawsuits from various state attorney generals and private individuals.
"According to the CFPB and the OCC, Capital One directed consumers with low credit scores or low credit limits to call centers when they called to activate newly issued credit cards ... The consumers were then offered Capital One's Payment Protection and Credit Monitoring add-on credit card products," the complaint states. "As a part of the high pressure tactics ... representatives used to sell these products, consumers were misled about the benefits ... deceived about the nature of the products, misled about the consumer's eligibility ... misinformed about the cost ... and at times enrolled ... without their consent."
As a result of its behavior Capital One had to "refund $143 million ... and pay $60 million in fines to both the CFPB and the OCC" as well as "adopt myriad of costly and expensive internal controls and remedial measures."
Capital One has a history of taking advantage of its customers, according to the complaint. The company was fined in 2007 by regulators in Great Britian and faced legal action in West Virginia this past January "for abuses associated with the exact same type of products and tactics related to the sale of the company's payment protection" products.
The complaint names nine of the company's board members and accuses them of "misconduct, mismanagement, corporate waste and lawless behavior."
Investors are represented by Daniel Cohen and Robert Cynkar both of Cuneo Gilbert & Laduca LLP of Alexandria, Va., by Brian Robbins, George Aguilar and Christopher Walters all of Robbins Umeda LLP of San Diego, Maria Cangemi and Christina Carroll both of Robein, Urann, Spencer, Picard & Cangemi APLC of Metairie, La. and Paul Warner of the Warner Law Firm of Cypress, Tex.