The Federal Deposit Insurance Corporation on Tuesday announced a settlement with Delaware-based Comenity Bank and Comenity Capital Bank of Salt Lake City, Utah, for deceptive practices related to the marketing and servicing of credit card "add-on products.” The banks are both wholly-owned subsidiaries of Ohio-based Comenity, LLC.

As part of the settlement, Comenity Bank will pay a civil money penalty of $2 million and provide restitution of approximately $53 million to harmed consumers. Comenity Capital Bank will pay a penalty of $450,000 and provide restitution of approximately $8.5 million to consumers. The violations occurred between January 2008 and September 2014

The banks offer credit cards through various retailers nationwide that are typically co-branded with these retailers. For these cards, the banks offer "Account Assure" and "Account Assure Pro," which are payment protection/debt cancellation add-on products to the credit cards. The products allow consumers who enroll to request certain benefit payments following specific life events including, but not limited to, involuntary unemployment and disability.

The FDIC determined that the banks violated Section 5 of the Federal Trade Commission Act by, among other things:

Representing to consumers that they would not be charged a fee for the products if their accounts had no balances, but charging fees to consumers in those circumstances.

Making material misrepresentations and omissions regarding the refund process applicable to consumers' cancellations of the products within the first 30 days of enrollment.

Making material misrepresentations and omissions regarding the conditions for receipt of the gift cards or account statement credits offered as incentives for enrolling in the products.

The FDIC orders, in part, require the banks to correct the violations, ensure future compliance with Section 5, and  implement a comprehensive restitution plan for consumers adversely afected by the violations.