Capital One class action lawsuitCapital One has been ordered to pay $210 million to settle allegations it tricked credit card customers into buying unwanted “add-on” products such as payment protection and credit monitoring. Nearly 2 million customers will share a portion of the Capital One credit card settlement, amounting to about $70 apiece. The announcement comes on the heels of a $10.5 million class action lawsuit settlement and $2 million State of Minnesota settlement with Discover Financial Services for the same charges: deceptive marketing of fee-based products.

The Capital One credit card product settlement was the first public enforcement case brought by the federal government’s new Consumer Financial Protection Bureau, established by the Dodd-Frank Act to increase oversight of consumer financial products.  The agency said Capital One customers were wrongly led to believe by call center workers that they needed to buy the add-on services to activate their cards or that debt protection or credit monitoring was free. Other customers were left with the impression that their credit scores would improve with the purchase, while some got billed even though they weren’t eligible.

The bulk of the settlement will go to consumers, with $60 million going toward penalties, $25 million to the CFPB, and $35 million the Office of the Comptroller of the Currency.

“Today’s action puts $140 million back in the pockets of 2 million Capital One customers who were pressured or misled into buying credit card products they didn’t understand, didn’t want, or in some cases, couldn’t even use,” said CFPB Director Richard Cordray. “We are putting companies on notice that these deceptive practices are against the law and will not be tolerated.”

Cordray said the CFPB will seek restitution for injured consumers in future enforcement actions, including against Discover Financial Services, which reached a class action lawsuit settlement this year to settle charges it deceptively marketed fee-based products, including debt protection and credit monitoring. The CFPB said it has already subpoenaed Discover.

“We know these deceptive marketing tactics for credit card add-on products are not unique to a single institution,” Cordray said. “We expect announcements about other institutions as our ongoing work continues to unfold.”

Capital One apologized for the deceptive credit card marketing tactics and blamed it on third-party vendors.

“Capital One’s third-party vendors did not always adhere to company sales scripts and sales policies for payment protection and credit-monitoring products, and the bank did not adequately monitor their activities,” the bank said in a statement.

Refunds from the Capital One credit card settlement will be automatically credited to customer accounts if they’re eligible. Eligible customers who no longer have a Capital One account will have a check mailed to them. Refunds are expected to be handed out later this year. Customers are urged to watch out for spammers claiming they will get them a refund. More information can be found in this post from the CFPB.

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29 Comments

  • Anonymous July 23, 2012

    Have Capital One Credit Card

  • Anonymous July 24, 2012

    i have a capital one card for year and had to remortagage my home topay off.

  • Anonymous July 25, 2012

    Dont think I qill ever get this paid off

  • Anonymous August 15, 2012

    I had one and was a victim of this with them. Hard to get them to discontinue and close out acct.

  • Anonymous August 16, 2012

    I have them charge to my credit for all kinds of protections plans but when I was hospitalize I was consider deliquent a pay it up and try to hang on for my credit so it wont go to my TRW. But It really costly if those services doesn’t help peoples out but monthly and monthly charge can raise a high balance.

  • Anonymous August 16, 2012

    This was my first credit card when I was younger, It’s the main reason my credit score is crap now. I spent $300, and somehow ended up owing them over $1,000 in very little time. Couldn’t pay it off until I was older so I could raise my credit score, and they never raised it, as they said they would.

  • Anonymous August 17, 2012

    had a capital one card,had to bankrup to get it off me.

  • Anonymous October 24, 2012

    Capital One is crap. They have a collection against me for $1800 from a $500 credit card. Everything over the $300 I used is FEES. I would pay up to a week early and they would hold my funds until after the due date, charge me a late fee, then state I did not make the minimum payment since the late fee was taken out of the money I sent to make the minimum payment. I called and told them they had better fix it. When they did not I told them I would pay ONLY the $300 I had originally used, but I was never able to catch it up as they played the game every time I sent payment. The Class Action suite against them does not seem to cover this, but does cover that the collections agency would call and state I needed to call Capital One, then when I called it was the collections. Anyone else had this issue? I opened a Cap One card to build credit as I had none, and now they are ruining what little credit I do have that I have worked very hard to build. Any information on other people with the same issue, and how they or you have removed this would be great. Thank you.

  • Anonymous November 6, 2012

    I was disabled while having the card. They told me to keep the Protection on the card (paid for each month) and when I receive the letter for Social Security Benefits, I would be covered up to $10,000 of debt owed. When it came down to putting a claim in, I wasn’t eligible because I was disabled and the plan won’t cover person with their own business. Now have a Collection and paying $25 per month.

  • dorothy December 29, 2012

    had a capital One acct,lost my job, tried to make payment got behind on my account of 300.00 it cost me $3504, I am being sued for.late fees and collection fees.
    BIG RIPOFF. Credit is ruined.

  • Claudia January 2, 2013

    Hav acct old with Cap1, now up to 4K; they keep asking for $, they refuse to send to collection; they will not settle; I am sure they are pursuing to sue me for these False funds. I would settle – but they do not want to; very wrong. They are vengful and play games on purpose.

  • Tammy January 12, 2013

    I had a Capital One account and asked if I could be placed in hardship b/c I had clots in my brain and I couldn’t afford to make the pmts. I only owed a few hundred but with % & late fees, I was sued for approximate $1,500.00, which the lawyer that represented them said I needed to pay $58.00 a month. I don’t have $58.00 but I tried to come up with it. I would cry and tell them to please cooperate, I’m really sick and now I pay their attorney $20.00 a month. I can barely let that go. I will never open a capital one account, even when my credit gets better and it will!!!! DIRTY DOGS.

  • Ernesto March 2, 2013

    I had Capital One, I owed $8,500.00. And they are charging me $20,000.00 that I have to pay. That’s $11,500.00 in interest. I tried settling with them. And they said they wanted the full amount. I hired an attorney Morgan Drexen and they told me Capital One was sueing me. Capital One has been the worst credit card company ever. They lie in their advertisements.

  • Kevin March 12, 2013

    Fucking rip-off rip off company that even asks “what’s in your wallet” and then gets sued for over 100 million dollars after deceptive and illegal business practices that drain millions of wallets.

    A sales clerk at Sears talked me into applying for one of their credit cards (capital one) saying I would save an additional $15 off their sales price. I had plenty of cash in my pocket to pay the $145 total but thought I would get the credit card, save $15, then pay off the entire balance when I received my first statement, thus saving $15 dollars as offered.

    Then I received my statement and discovered that they charged a $59 “annual fee” which I was not made aware of when I signed up for their credit card. Believe me, I was pissed because spending $59 to save $15 makes absolutely no sense.

    Then I received a letter stating that I had been denied for their credit card, which was after they had already extended credit to me, and in addition some of the foreign made cloths I purchased started falling apart.

    Then the capital zeros sent me my next credit card statement for my non existent credit card and now they are charging me $35 in late fees.

    I was so pissed I did not make a payment and of course their phone calls started, and it gets worse. The phone calls were before 8:00 am-about 50 such calls starting as early as 6:15 am, while I am self employed and get up about 10:00 am.

    I did not answer the and after awhile I responded by text and stated that they were harrassing me and demanded they stop calling before 8:00. I doubt they had anybody to read my text, but regardless I put them on notice, and the before 8:00 am calls continued. So I finally answered an early call and informed capital zero that it was 6:30 am and to never call me again ever! He said they would never call again before 8:00 am and would make a note of it. Then a couple days later I got called before 8:00 am and I was pissed!!!

    Somedays I would get 3 or 4 calls before 8:00 am on the same day! So I finally answered one, explained the entire story above, and offered to settle the matter by paying the entire amount of my purchases, and not a penny more such as the $59 annual service fee. After going around and around with their rep for about 15 minutes he told me could not accept my fair offer, so I told him they would have to sue me if they wanted to collect, and that I would to tell a judge all capital zero. Now my balance is twice what it started at.

    Mr Sears and Mr Robuck are probably twisting in their graves and I will never shop at Sears EVER again and you have warned and Sears and capital one.

    • Tracey January 30, 2014

      Be very careful what you say AND how you say it to these people. They record EVERYTHING you say! If you tell them “never call me again!”
      They won’t and while this is great for a little while. They will still keep charging you all of those lovely late fees, over the limit fees, etc. Only now you won’t have a clue what they’re doing because they won’t call. And depending on how you worded you comment to them, you may no longer even get a bill.
      Which is what happened to me after 7 calls before noon. My calls, like yours, started quite early around 6 am. I finally snapped & told the annoying rep on the phone ” Do No Call Me, Do Not Write to Me, Do No Contact Me EVER AGAIN!”
      And they didn’t. I had to call them to find out what my current balance was. And when I asked them why they didn’t send me one, they said. “Well, once you tell us Not to contact you. We legally cannot contact you. Unless you contact us and tell us differently.”
      Which honestly is just a little too convenient. But I did want to give you a warning.
      Good Luck.
      Tracey

  • Nilsw April 23, 2013

    Capitalone has acquired both Orchard bank, and Household bank’s credit card lines. This happened about a year ago. I have requested numerous times to have these consolidated with my two crappy , existing, capital one accounts. They say it is against their policy to do so. Is thaere a lawyer out there interested in addressing this issue, or for that matter others in similar circumstances? It seems like the only thing these jerks listen to is the court system.

  • Angel May 30, 2013

    IS THERE ANY NEWS ABOUT THE SETTLEMENT.

  • Shannon July 11, 2013

    It all sounds great, but we’ve faxed and mailed in the info for our SCRA rates since 2011 and the latest 2 days ago. They keep stating they didn’t receive the mail and faxes. I’m just given a oh so sympathetic apology and told to mail or fax in again. Nice, right?

  • Angel July 14, 2013

    IS THERE UPDATES ABOUT THE SETTLEMENT.

  • Horace A. Cardoza September 27, 2013

    I had an account with Chase bank and Capital one bank in the past I closed them both in january 2013
    . Thank you .

  • Allen Maluchnik September 30, 2013

    I have had a Chase and two Capital One Banks cards.

  • Dawn Jeffery September 30, 2013

    I had a Capital One and a Household Bank (Cap One) card.

  • Nicole Dut October 1, 2013

    I am part of this i had a capital one credit card and paid it in full and they sid that i never made payments and charged me high interest rates. I can prove i paid them. I have not gotten any documents about this settlement and they have been calling me non stop and then when speaking to them they hang up.

  • kathy zorich October 3, 2013

    I have been trying to pay this off for 4 years. I had protection but when my husband turned ill and I had to miss work, my protection didn’t ” apply “, when I was very ill, it still didn’t. explain what the protection plan is please. I have been paying 10.00 a month since and getting no-where.

  • Soon October 20, 2013

    I am now in collections with capitol one because I refused to pay the fines and increased rates after the fraudulent ‘payment protection’ which they sold me for an extra $10/month did not actually protect me from anything. I’m researching now if this Class Action applies to me. I did receive information in the mail over 2 yrs ago but it basically just said ‘stay posted.’ Does anyone know how I can find out more?

  • Dan Morton November 24, 2013

    What is the bottom-line on this lawsuit.

  • chappy60134 November 27, 2013

    please add me to this lawsuit also

  • Lorinda November 27, 2013

    Please add me to this lawsuit

  • ken b November 28, 2013

    my story seems the same as a lot here i make payments using the chek box on thier web site for the minimum payment then they charge me late fee and not paying the minimum by 16 cents 500 dollar limit card spiraled to over 1200 then 2000 in collections ..when will someone do something about this scam company???

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