WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) has taken legal action against Horizon Card Services and its CEO Robert Kane, alleging the company misled consumers through deceptive marketing and imposed illegal fees. The lawsuit highlights the CFPB’s commitment to protecting consumers, particularly those financially vulnerable, from unfair business practices.
Horizon Card Services, operating under various brand names such as Boost Platinum Card and Horizon Gold Card, is accused of luring consumers into signing up for an expensive membership credit card. This card, with annual fees nearing $300 on a $500 credit limit, could only be used to purchase goods from Horizon’s online store, which offered a limited selection of overpriced items. According to the CFPB, between 2017 and 2021, nearly 900,000 consumers were enrolled in Horizon’s membership program, paying over $51 million in fees despite 93% never using any Horizon product.
CFPB Director Rohit Chopra stated, “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.” Chopra emphasized the bureau’s ongoing scrutiny of illegal fee harvesting, aiming to hold individual financial executives accountable.
The CFPB’s lawsuit alleges that Horizon and Kane violated the Consumer Financial Protection Act and the Truth in Lending Act. Key accusations include misleading marketing, excessive fees, and an arduous cancellation process. The company is said to have advertised its product as a conventional credit card without disclosing its true nature, a membership program with a restricted line of credit usable only at Horizon Outlet.
Additionally, Horizon charged membership fees that exceeded the allowable limit set by the Truth in Lending Act. Customers faced up to $24.99 monthly fees, consuming 60% of the credit limit in the first year. The CFPB also criticized Horizon’s cancellation tactics, which involved a lengthy process with various sales pitches and often failed to issue full refunds unless consumers took further action.
The CFPB is seeking judicial intervention to halt Horizon’s alleged unlawful conduct and secure redress for affected consumers. The bureau also demands a civil money penalty, which would contribute to the CFPB’s victims relief fund. This lawsuit underscores the CFPB’s role in enforcing financial laws and safeguarding consumer rights against deceptive business practices.
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