Raising credit card interest rates on customers without telling them has gotten Capital One in trouble, again. A judge earlier this year thought the case saying Capital One has broken the Truth in Lending act wasn’t worth his time and dismissed it. The lawsuit was then reinstated July 22 by the 9th Circuit. Now there are credit card rules making it illegal to raise credit card rates without informing consumers.
Lawsuit for Capital One
The Capital One suit says the company has deceptive lending because they raise interest rates without “clear and conspicuous” warning first which makes them unfair competition. Raquel Rubio was a consumer who had been with the company for years and never gave them issues and, according to Courthouse News Service, then saw her interest nearly double suddenly.
Capital One deception
Rubio sued Capital One for breach of contract, violation of the Truth In Lending Act and unfair competition. A federal judge dismissed the class action, ruling that Capital One satisfies its obligation to be clear and truthful by stating the rates and fees were subject to change. Capital One reserved the right to “amend or change any part of your Agreement, including periodic rates and other charges, or add or remove requirements … at any time.”
Fine print deception from Capital One
The Capital One class action lawsuit was revived on appeal. Capital One was told by a three judge panel that it can’t say the rates are “fixed” if they’re subject to change. Reuters reports that Rubio had accepted a February 2004 mail solicitation from Capital One that offered a credit card with a 6.99 percent rate on balance transfers and purchases. The solicitation incorporated a required table that said in 10-point type the rate could rise if Rubio missed a payment, exceeded her credit limit or had a payment returned. But in eight-point type on the very same page, it also said terms were “subject to change,” and a cardholder agreement that Rubio received the next month said Capital One could “amend or change any part” of her agreement “at any time.”. 15.99 percent became the rate Rubio had to pay as of August 2007 although she hadn’t broken the Capital One agreement.
Additional info at these websites
Courthouse News Service
courthousenews.com/2010/07/22/29062.htm
Reuters
reuters.com/article/idUSN2116752120100721
