CFPB orders Bilt to reimburse fees tied to February card-partner transition

The Consumer Financial Protection Bureau said Bilt Technologies will reimburse about 500 newly identified customers for overdraft fees, late fees, and insufficient funds fees tied to its move to new bank and card partners. For high-risk payment operators, this is the part where a partner switch stops being a backend project and becomes a consumer-redress exercise with a deadline.

1. The CFPB said Tuesday that, following discussions with Bilt, the fintech agreed to provide full redress to customers affected by the transition. Bilt notified the agency that it had proactively contacted the limited number of potentially affected customers and offered reimbursement for fees linked to the changeover, and the CFPB said the company will provide redress by Thursday.
2. Bilt declined to comment Wednesday on how many total customers will be reimbursed. The CFPB said it has been working to ensure consumers affected by Bilt’s transition to a new bank partner are “appropriately remedied,” which is agency-speak for the cleanup phase after the customer experience has already gone sideways.
3. Last week, Bilt said its February card transition “attracted unexpectedly high demand” and that “some of our members experienced gaps in service that are simply unacceptable to us.” The company said it increased customer service capacity and proactively communicated with impacted members, adding that all outstanding issues related to the February transition had been addressed and resolved.
4. Bilt, based in New York City, offers credit cards customers can use to make rent payments. Its previous bank partner, Wells Fargo, cut ties with the company last year. Bilt then linked with Column Bank to issue cards and fintech Cardless to service cards. Existing customers could either switch to a Wells Fargo credit card or transition to Bilt’s card with the new partners.
5. The February transition drew complaints from consumer group Protect Borrowers, which told CFPB Acting Director Russ Vought in a March letter that customers had encountered “a stunning range of harmful errors and breakdowns.” The group alleged that Bilt debited bank accounts for rent and mortgage payments without passing those payments on to landlords, and said AI-powered chatbots provided subpar customer service. Senator Elizabeth Warren, D-MA, also said some customers could not make payments on balances still held at Wells Fargo, or had balances transferred to new cards without authorization.

The Senate Banking Committee’s ranking member last month pressed Bilt CEO Ankur Jain for information on the issue, saying the company’s practice of immediately debiting rent payments raises questions about compliance with the Credit Card Accountability Responsibility and Disclosure Act of 2009. For PSPs and bank partners, the useful read here is simple: when a card migration touches rent, bank debits, and balance transfers at once, the operational blast radius is not theoretical.