Providian National Bank has agreed to reimburse customers at least $300 million to about 3 million of its 13 million customers in a settlement with the U.S. Office of the Comptroller of the Currency (OCC) and the San Francisco District Attorney's Office.

Providian, the nation's sixth-largest credit-card issuer, was accused of deceiving and unfairly charging its customers since June 1995 by misleading them about its credit-protection plan, balance transfers, annual fees and other services.

Providian said it disagreed with the charges but agreed to the settlement to avoid lengthy litigation. The bank also claimed that complaints against it have dropped sharply since it started a customer-satisfaction program last year.

The settlement was the largest enforcement action ever by the OCC and is the first enforcement action under the Federal Trade Commission Act by a bank regulatory agency.

"We will not tolerate abuses" that breach the trust between banks and their customers, Comptroller of the Currency John D. Hawke Jr. said in announcing the settlement.

Besides the reimbursements and a $5.5 million civil fine negotiated by the San Francisco District Attorney, Providian agreed to change its policies and telemarketing scripts so that all fees, charges and restrictions are accurately and fully disclosed.

In the past, Providian marketed cards with "no annual fee" but charged customers $156 annually for a credit-protection plan. Regulators said the bank also misled customers about the rebates and lower interest rates they would receive for transferring balances.