Several recent class action lawsuits have been filed against Capital One and are still pending.
This credit card company once had a good reputation. It led the way in offering the first low interest rate card on purchases, balance transfers and cash advances.
It forced other issuers to lower their rates, too. But then Capital One customers started complaining that their payments, mailed in a full two weeks before they were due, were being marked as having been received late.
And Capital One was charging them late fees and jacking up their interest rate as a result, which is why the lawsuits have been filed.
One case that received wide media exposure involved a man who had emergency open heart surgery. Due to his illness, he mailed in his Capital One payment late one month. Actually, Capital One received it just one day late. When he called to explain what had happened, they coldly told him "too bad" and jacked up his interest rate from about 7% to 21%. (Of course, Capital One isn't alone in using this tactic -- Citibank, MBNA, Providian, First USA do this as well.)
Capital One sued over marketing practices
Minnesota AG says ‘fixed rate’ ads are misleading
The Minnesota state attorney general’s office has sued one of the nation's largest credit card issuers, claiming it is misleading consumers with promises of “fixed“ interest rates, then hiking their rates as much as 400 percent.
Capital One and its subsidiaries are using bait-and-switch sales tactics, according to Attorney General Mike Hatch. While the firm markets credit cards as having the nation's lowest “fixed rates, “rates can and often do change, the lawsuit alleges. In fact, 40 percent of Minnesota residents who've signed up with a Capital One card thinking their rate is fixed have hit a “tripwire,” causing an overnight rate hike, Hatch said.
“(They are) changing the English language,” he said. “Fixed rates don't mean fixed at all.”
msnbc.com Jan. 3, 2005
Capital One Card Insurance ‘Worthless,’
Lawsuit Says -- Capital One Financial Corp., the third-biggest issuer of Visa credit cards, rips off consumers by selling payment-protection insurance that is “essentially worthless,” according to a lawsuit.
Jan. 13 Bloomberg
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