Raising credit card interest rates on customers without telling them has gotten Capital One in trouble, again. Capital One was being sued for breaking the Truth in Lending Act earlier this year, but it was dismissed by a judge. But the 9th Circuit reinstated the Capital one class action lawsuit July 22. Now you will find credit card rules making it illegal to raise credit card rates without informing consumers.
Capital One class action suit
The Capital One class action lawsuit accuses the credit card business of unfair competition and deceptive lending for raising credit card interest rates without giving consumers “clear and conspicuous” warnings. Raquel Rubio was a consumer who had been with the business for years and never gave them difficulties and, as outlined by Courthouse News Service, then saw her interest nearly double suddenly.
Capital One deception
Rubio started the lawsuit against capital one since they broke the Truth in Lending Act and were unfair competition. The suit was initially dismissed sine Capital One does have written that they may change fees and rates at any time. 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 used by Capital One to say this
An appeal is what made the Capital One class action lawsuit come back to life. 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 in the mail from Capital One with a 6.99 percent rate in February 2004. In 10 point type in this offer, it explained that under certain circumstances, the interest rate might be raised. ”At any time” Rubio was allowed to “amend or change” the agreement she had from capital one as outlined by the form she received the month after receiving the offer which said “subject to change” on it. Capital One raised Rubio’s rate in August 2007 to 15.99 percent though she had not triggered any of the conditions warranting a hike.
Citations
Courthouse News Service
courthousenews.com/2010/07/22/29062.htm
Reuters
reuters.com/article/idUSN2116752120100721
