Capital One is in trouble because they have again raised credit interest rates without informing customers. Capital One was being sued for breaking the Truth in Lending Act earlier this year, but it was dismissed by a judge. The 9th Circuit thought the lawsuit should be reinstated on July 22. Now, it is illegal because of new credit card rules to raise interest rates arbitrarily.
Capital One class action suit
The Capital One class action lawsuit accuses the credit card company of unfair competition and deceptive lending for raising credit card interest rates without giving consumers “clear and conspicuous” warnings. The Courthouse News Service reports that after having the credit card for 3 and a half years and complying with the terms of the contract, lead plaintiff Raquel Rubio claimed her credit card interest rate instantly more than doubled.
Capital One can change things whenever they want
Rubio sued Capital one for being unfair competition and for not holding true to the Truth in Lending act. Capital one does state they can change the rates and fees which is why the first judge dismissed the suit. Capital One reserved the right to “amend or change any part of your Agreement, including periodic rates and other charges, or add or remove needs … at any time.”
Capital One cheats with fine print
The Capital One class action lawsuit was revived on appeal. Capital One was told by a 3 judge panel that it can’t say the rates are “fixed” if they are subject to change. Rubio received, according to Reuters, a credit card offer within the mail from Capital One with a 6.99 percent rate in February 2004. In 10 point font on this letter, it was clearly stated that things like a missed payment or returned payment might lead to a rise in interest rate. But in eight-point type on the exact 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.
More information on this topic
Courthouse News Service
courthousenews.com/2010/07/22/29062.htm
Reuters
reuters.com/article/idUSN2116752120100721
