On July 26, 2018 the Federal Reserve Board issued a consent order against Community Trust Bank, Inc. of Pikeville, Kentucky, for unfair and deceptive practices, requiring the bank to pay approximately $4.75 million in restitution to approximately 11,000 consumers and make certain consumer compliance enhancements. The practices were in effect from 1997 to present.
It appears that the bank violated section 5 of the Federal Trade Commission Act in its offering of deposit account add-on products to consumers. The bank represented to consumers that all of the add-on product benefits would be effective upon enrollment when, in fact, consumers had to take additional steps to receive some of their benefits. 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.
The bank must begin making restitution payments to consumers after regulatory non-objection to the restitution plan, which is due within 60 days of the issuance of the consent order.
A copy of the consent agreement is available at: https://www.federalreserve.gov/newsevents/pressreleases/files/enf20180726b1.pdf