McLean,Va.-based HSBC Bank USA NAagreed to the issuance of a consent order by the OCC, which has identified deficienciesin the bank's practices that resulted in violations of the Federal Trade CommissionAct.
The bankneither admitted nor denied any wrongdoing.
The OCCassessed a $35 million penalty against the bank. The penalty, which will be paidto the U.S. Treasury, reflects a number of factors, including the scope and durationof the violations and financial harm to customers from the unfair practices.
The regulator— which found that the bank's billing practices violated the FTC Act that prohibitsunfair and deceptive acts or practices — ordered the bank to identify and make restitutionto harmed customers.
Accordingto the OCC, customers eligible for restitution include those who were unfairly billedfor CreditKeeper, a credit-monitoring product marketed and sold by the bank, itsaffiliate HSBC Bank Nevada NA, and their vendors.
The restitutionwill benefit customers who enrolled in and paid for the credit-monitoring productbetween January 2004 and May 2012, but did not receive the full benefit of the product.The restitution will include the full amount paid for the product, plus any associatedover-limit fees, finance charges and interest.
The OCCorder also requires the bank to ensure compliance with the FTC Act, improve governanceof third-party vendors associated with add-on consumer products, develop a riskmanagement program for add-on consumer products marketed or sold by the bank orits vendors, and develop a consumer compliance internal audit program for add-onconsumer products.
HSBCBank USA is a unit of HSBC HoldingsPlc.