Illegal Fees, Deceptive Practices: Horizon Card Services Exposed

Users paid millions in fees despite never using card

Horizon Card Services, a company that marketed a series of secured credit cards that could only be used at Horizon's online store, is being sued by the Consumer Financial Protection Bureau (CFPB) for charging illegal fees and for other deceptive practices.

The Horizon cards typically came with a credit limit of $500 but required $300 in fees billed at $24.99/month. These fees exceeded the limit allowable under the Truth in Lending Act.

In addition to the limited line of credit, consumers could only use the card at the Horizon Outlet, an online store owned and controlled by Horizon. The CFPB's investigation found that 94% of customers never used the card. Despite this fact, those customers paid some $45 million in fees to Horizon.

Horizon also created a difficult process for cancelling the card so that they could keep collecting fees from customers.

“The CFPB is suing Horizon and its CEO Robert Kane for gouging low-income Americans and making it nearly impossible to cancel for a full refund,” said CFPB Director Rohit Chopra. “The CFPB will continue to closely scrutinize illegal fee harvesting and price gouging, and hold individual financial executives accountable for their role in wrongdoing.”

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