Advanta Corp., the credit card issuer, has agreed to pay customers $35 million as compensation for alleged "deceptive and unfair practices."

Under the settlement, Advanta will also pay a civil penalty of $150,000.

Earlier in May, Advanta’s bank unit, which held $2.39 billion in deposits as of March 31, cut off approximately 1 million customer credit-card accounts as it was facing huge loan losses due to which defaults surged to 20 % at the end of the first quarter.

But at that time, the company did not admit or deny any liability.

Federal Deposit Insurance Corp. informed that Advanta Corp. would pay a restitution of around $14 million to businesses that used Advanta's "Cash Back Reward" program and $21 million to account holders affected by the company's pricing strategies on credit cards.

It may be noted here that, the Company reported three successive quarterly losses totaling $142 million.
 
The company, however, is ready to obey the order but it didn’t admit any wrongdoing.
 
In the recent trading, Advanta shares plunged by less than a cent to 42 cents at Nasdaq.