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Capital One has
been criticised for sending more than one million partly completed credit card
cheques to its customers.
Each had the customer's name and a loan amount printed on it, meaning that all
the customer had to do in order to obtain a loan was pay the cheque into a bank
account.
The Banking Code Standards Board (BCSB) said the lender's action breached the
banking code.
Under a change made in March 2005 to the Banking Code, enders were barred from
sending unsolicited credit card cheques to customers with a pre-completed loan
amount.
A spokesman for Capital One said the bank immediately stopped any further
pre-filled cheques from being sent to customers and informed the BCSB as soon as
the error was spotted.
The tactic has been criticised by charities and MPs for encouraging a debt
culture and irresponsible lending.
Robert Skinner, chief executive of the BCSB, commented: "We are disappointed at
this serious failure of compliance management.
"However, Capital One, having identified the breach, co-operated fully with us
in our investigation".
In all, 800,000 customers received the cheques and 20,000 were used.
Source:
Getting Paid
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