CAPITAL ONE CREDIT CARD FRAUD CLASS ACTION UPDATE: On January 5, 2010, our law firm filed a Capital One class action complaint against Capital One Bank and Capital One Services, Inc. in the United States District Court for the District of South Carolina (Spartanburg Division). You can read a complete copy of the Capital One class action complaint by clicking here.
If you have a credit card from Capital One Bank and/or Capital One Services, Corp., you may be entitled to compensation. Please contact our office by completing the Capital One Client Questionnaire, and calling before the deadline toll-free: 888-350-3931
This notice applies to all residents of Arkansas, Connecticut, Missouri, New York, Vermont, Wisconsin, New Jersey, New Mexico, South Carolina, Kansas, Washington and California. If you live in one of these states, you may be eligible for compensation if you meet any of the following requirements:
- You were solicited by Capital One via mail and/or telephone to purchase a credit card;
- You were marketed by Capital One for "Payment Protection" coverage for your credit card account balances;
- You paid Capital One for "Payment Protection" coverage on your credit card; or
- You were retired or over 65 years old at the time that you were solicited for, received, and made payments for, the "Payment Protection" coverage from Capital One.
Please contact our law firm immediately for a free consultation. The law firm of Craft Hughes Law, P.C. is actively reviewing potential cases of credit card fraud against Capital One. Currently, we are investigating allegations that
If you or a family member live in Arkansas, Connecticut, Missouri, New York, Vermont, Wisconsin, New Jersey, New Mexico, South Carolina, Kansas, Washington or California, and meet any of the 4 requirements above, you may be eligible to file a claim. Please contact a Capital One credit card fraud attorney; or call us toll-free at 1-888-350-3931 and ask to speak to attorney W. Craft Hughes.
"Payment Protection" from Capital One
Payment Protection is represented to the consumer to be a Capital One product that will pay minimum payments on credit cards under certain circumstances for a limited period of time, and thereby "protect" the consumer's credit by insuring that timely payments are made on account balances so that the consumer does not sustain additional fees, charges and penalties on credit card balances or adverse credit reporting to the credit bureaus.
Capital One is the largest issuer of credit cards in the country with millions of cardholders and $12 billion in revenue in 2006. There are thousands of Capital One cardholders in Arkansas (AR), Connecticut (CT), Missouri (MO), New York (NY), Vermont (VT), Wisconsin (WI), New Jersey (NJ), New Mexico (NM), South Carolina (SC), Kansas (KS), Washington (WA) and California (CA) who have paid for Payment Protection and receive no benefit. The terms of the Payment Protection product are not adequately disclosed to consumers before the consumer accepts or is charged for the product, and Payment Protection coverage is so restricted in benefits, and processing claims under the coverage is made so difficult by Capital One, that the product is essentially worthless.
Capital One apparently makes no effort to determine if the Payment Protection coverage is available to the consumer before charging for the product. For example, numerous senior citizens and retired Florida residents were charged for Payment Protection although they are excluded from receiving benefits by Capital One because they are not employed.
Despite the billions of dollars the Company earns from its operations, Capital One increased its fee income by devising and marketing the Payment Protection product, a product which provides no benefits to thousands of U.S. residents who are charged for the "service".
Company History and Information
Capital One Bank is a Virginia chartered limited purpose credit card company having its principal place of business in Mclean, Virginia.
Capital One Services has its principal place of business in McLean, Virginia; and is the sales and marketing arm of Capital One Bank.
Capital One's "Payment Protection" Product
Capital One markets a credit card product to U.S. citizens that it calls Payment Protection. This product is typically offered to consumers who fall into a "subprime" credit category and therefore have low credit limits on their credit cards.
Capital One markets the Payment Protection product as a service that will safeguard the consumer's credit by making minimum credit card payments under certain highly restricted circumstances such as total disability. In addition there appears to be a "credit life" feature to this product, although this is buried in the fine print and is not described in the product information as credit life insurance.
Capital One either provides Payment Protection to consumers through direct marketing and acceptance by the consumer of the product, or unilaterally imposes the Payment Protection feature on the consumer's credit card and requires the consumer to take action to cancel Payment Protection. In either case, Capital One fails to provide adequate information regarding payment Protection coverage and restrictions prior to selling the product, and then provides information about the product that is misleading.
As an example of misleading language, the Payment Protection product appears to be a financial product or service that is exactly analogous to credit life or disability insurance, yet the marketing materials carefully avoid any use of the word "insurance". The marketing materials do, however, refer to making "claims". Payment Protection is a monthly charge that is assessed each month as $0.89 per $100 of the consumer's current credit card balance.
Although represented to the consumer as something in the nature of an insurance product, the Payment Protection product is virtually worthless because of the numerous restrictions that are imposed after the consumer accepts or receives the product, and because of the administrative and bureaucratic hurdles that are placed in the way of the consumer who attempts to secure payments from Capital One under this coverage.
This product is sold to consumers without any consideration for the circumstances of the consumer or any reasonable investigation into facts that may cause the product to be worthless to the consumer. For instance, many senior citizens and retired persons are charged for this product although they are categorically excluded from Payment Protection payments should they become ill or incapacitated and unable to make credit card payments.
The Payment Protection product serves Capital One's interest in generating additional fee income, and has the added benefit to Capital One of lowering available credit to its subprime cardholders through the imposition of this additional fee.
Capital One also avoids including Payment Protection charges in the finance charge information that must be included in the "Schumer box" or Truth in Lending Act finance charge disclosures, although the Payment Protection fee is essentially an additional cost of credit to the subprime borrowers upon whom this charge is levied.
Capital One usually sends a standard form letter to consumers congratulating them for "enrolling this account in Payment Protection." The letter usually states the following:
1. Payment Protection is ready when you need it. Developed by Capital One and administered by Consumer Membership Services, it pays the minimum monthly payment on your eligible balance in the event of involuntary unemployment or temporary disability. Plus:
a. Starting a claim is easy - simply call 1-888-527-6904.
b. This peace of mind is only $0.89 per $100 of your monthly statement balance.
c. The charge for Payment Protection is conveniently billed to your Capital One account each month. You pay nothing if your monthly statement balance is zero.
d. You can cancel at any time.
2. A sample Addendum contains additional important information, including how to file a Payment Protection claim. Remember, filing a claim will not adversely affect your credit rating or change the terms of your account.
3. You've joined the more than 5 million Capital One cardholders who safeguard their credit with Payment Protection. As your trusted financial solutions partner, Capital One helps you protect what's in your wallet.
Also attached to the letter is a page describing restrictions on the Payment Protection coverage in the form of " questions and answers ". These restrictions are revealed to the consumer only after the coverage has already been accepted and billed:
Q: What is the advantage of Payment Protection?
A: It provides peace of mind in knowing that the minimum monthly payment on your eligible balance will be paid and helps safeguard your good credit rating with Capital One.
Q: What if I am self-employed or retired?
A: Your are eligible for the loss of the benefit; however, the other features are not available to you in your current employment status.
Q: How soon after I enroll in Payment Protection can I file a claim and begin receiving payments?
A: You are eligible for the loss of life benefit the day you enroll. However, you must be out of work for 30 consecutive days after enrolling in the product before an unemployment or disability claim can be accepted.
Q: Once my claim is activated, how long will my benefits continue?
A: Your benefits may continue for up to 12 months, or as long as your are eligible. Please refer to the Addendum for more details.
Q: Does Payment Protection automatically cover all of my Capital One credit card accounts?
A: No.
On the reverse side of the "question and answer" page are additional terms and conditions. That page is self-described as an " Addendum" although the Payment Protection product is in fact a new and separate transaction.
This document is usually received by consumers at the same time as the "congratulations letter" and the "Q and A letter" discussed above. The so-called " Addendum " provides the following restrictions on the coverage:
Inability to Work
If you become unable to work through (1) involuntary termination or (2) temporary disability, and remain unemployed or unable to work due to a temporary disability for at least 30 consecutive days, PAYMENT PROTECTION will make benefit payments, subject to the limitations in this "Inability To Work" section, for up to 12 months while you remain unemployed or unable to work due to a temporary disability.
To be eligible for benefit payments, you must be gainfully employed by someone other than yourself or another cardholder on your Account on a full-time basis in a non-seasonal occupation when the loss of employment occurs. Loss of employment cannot be a result of retirement.
...You must be regularly attended by a licensed physician who must certify your continued disability each month. If the primary and the secondary cardholder are both eligible at the same time for benefit payments due to their inability to work, only one such benefit payment will be made.
Loss of Life; Total and Permanent Disability
If you die or become totally and permanently disabled, PAYMENT PROTECTION will pay your eligible balance as of the date of death or total and permanent disability, up to the amount of the credit limit, or $10,000, whichever is less. Total and permanent disability means that you can no longer will likely never be able to engage in any substantial activity required for wages, gain, or profit. Total and permanent disability as a result of self-inflicted injuries is not included in this benefit. If the deaths of the primary and the secondary cardholder occur as a result of the same event, only one death benefit will be paid.
Payment Protection Does Not Apply to Most Consumers
To summarize, the following restrictions on Payment Protection are imposed on consumers after acceptance of the coverage, in small print, in language that is not readily comprehensible to the average consumer:
- It does not apply to self-employed persons
- It does not apply to persons employed by a co-cardholder
- It does not apply to persons who are not employed "full time" although the Capital One documents do not define exactly what "full time" means
- It does not apply to persons in a seasonal occupation at the time of loss of employment
- It does not apply unemployed persons
- It does not apply to retired persons
- It does not apply for the first 30 days of unemployment or disability
- It is limited to 12 months
- It requires monthly certification by a physician of continued disability
- It does not apply if injuries are self-inflicted
*Capital One makes no reasonable efforts to determine if the coverage applies to the cardholder prior to charging for this service.
Please contact our law firm immediately for a free consultation if you or a family member live in New Jersey, New Mexico, South Carolina, Kansas, Washington or California, and received "Payment Protection" from Capital One. Please contact a Capital One credit card fraud attorney; or call us toll-free at 1-888-350-3931 and ask to speak to attorney W. Craft Hughes.
Consumer's Potential Allegations Against Capital One
Consumers targeted by Capital One as part of its Payment Protection sales, billing and marketing schemes, and who paid for Payment Protection may be entitled to compensation. Capital One states in its marketing materials that "more than 5 million Capital One cardholders" purchased the Payment Protection product. We believe there are approximately 750,000 cardholders who have paid for Payment Protection living in Arkansas, Connecticut, Missouri, New York, Vermont, Wisconsin, New Jersey, South Carolina, New Mexico, Kansas, Washington and California. If you live in one of these states, you may be eligible for compensation if you meet any of the following requirements:
- You were solicited by Capital One via mail and/or telephone to purchase a credit card;
- You were marketed by Capital One for "Payment Protection" coverage for your credit card account balances;
- You paid Capital One for "Payment Protection" coverage on your credit card; or
- You were retired or over 65 years old at the time that you were solicited for, received, and made payments for, the "Payment Protection" coverage from Capital One.
Please contact our office by completing the Capital One Client Questionnaire, and calling before the deadline toll-free : 888-350-3931
You may also complete and submit our on-line contact for an immediate response. The law firm of Craft Hughes Law, P.C. is actively reviewing potential cases of credit card fraud against Capital One.
