Santander Bank has suspended issuance of credit cards while it looks into overcharge issues, and has run into consumer regulatory issues in the past.
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Santander Bank has suspended its issuance of credit cards after it discovered some of its customers were charged too much interest.
A statement on the card issuer’s website states, “We are not taking applications at this time and apologize for the inconvenience.”
According to a Boston Business Journal news report, the bank has taken this action as a result of overcharges on interest rates to some credit card customers; they were charged a higher interest rate than they had agreed to. Santander will continue serving existing card customers, and will resume issuing new cards after it has dealt with the interest overcharge issue.
Santander Bank could be subject to regulatory action as a result of the overcharges. For one, the Credit CARD Act protects consumers from unfair and abusive practices, and also provides for transparency in billing.
The bank has run into regulatory issues relating to credit cards in the past. In 2015, it had a brush with the Office of the Comptroller of the Currency on account of billing issues on its identity theft protection product “Sovereign Identity Protector.”
In August 2018, at the time that matter was resolved, Santander CEO Scott Powell said in a release, “We are resolving legacy issues and running Santander US at high operating standards. We look forward to operating with greater freedom as we continue building trust with new and existing customers.”
Santander Consumer USA, a Dallas-based affiliate of the bank, has also faced a similar issue of overcharging relating to an add-on to its auto loan products. In that matter, the affiliate reached a settlement with the Bureau of Consumer Financial Protection in August 2018. Among other provisions, the affiliate had to pay out more than $9 million as restitution to consumers in that CFPB settlement.
Responding to an e-mail seeking comment, Santander Bank said, “Santander Bank recently identified – and is in the process of correcting – some minor errors related to credit card interest calculations and disclosures affecting a small percentage of our credit card customers. We will continue to service our existing customers without interruption and will resume our credit card offerings as soon as possible.”