A Kentucky bank must pay about $4.75 million in restitution to 11,000 of its customers for offering deposit add-on accounts, but not telling consumers that all of the products would have no charge related to them, the Federal Reserve said Thursday.
In a consent order reached with Community Trust Bank, Inc. of Pikeville, Ky., the Fed said the bank violated provisions of the Federal Trade Commission Act when, in offering deposit account add-on products, it represented that all of the add-on product benefits would be effective upon enrollment.
“In fact, consumers had to take additional steps to receive some of their benefits,” the Fed said in a release. “The bank did not adequately disclose the additional steps prior to enrollment and did not explain to consumers that they would be billed regardless of benefit activation.”
Community Trust must begin making restitution payments to consumers, the Fed said, after “regulatory non-objection to the restitution plan, which is due within 60 days of the issuance of the consent order.”