The Federal Reserve Board ordered Pikeville, Ky.-based Community Trust Bank Inc. to pay roughly $4.8 million in restitution to about 11,000 customers, stating that the bank engaged in unfair and deceptive practices.
The consent order stated that the bank violated the Federal Trade Commission Act after it failed to adequately disclose instructions and the payment system to customers in connection with its offering of deposit account add-on products. The bank purportedly told customers the add-on products would be effective upon enrollment, but customers had to take extra steps to receive some benefits. The bank also did not explain to them that they would be billed regardless of benefit activation.
The bank, a unit of Community Trust Bancorp Inc., must begin making restitution payments to consumers after regulatory non-objection to the restitution plan, which is due within 60 days of the issuance of the consent order.