Interest rates lawsuit for Capital One

Raising credit card interest rates on customers without telling them has gotten Capital One in trouble, again. A class action lawsuit accusing Capital One of violating the Truth in Lending Act by raising credit card interest rates without warning was dismissed by a federal judge earlier. The 9th Circuit thought the lawsuit should be reinstated on July 22. Now you will find credit card rules making it illegal to raise credit card rates without informing consumers. Article source – Capital One sued again for deceptive interest rate increases by Personal Money Store.

Lawsuit for Capital One

Deceptive lending and being unfair competition are the reasons for the Capital One class action suit as they are said to change interest rates without “clear and conspicuous” warnings first. Raquel Rubio was a consumer who had been with the company for years and never gave them problems and, according to Courthouse News Service, then saw her interest nearly double suddenly.

Capital One deception

Rubio began the lawsuit against capital one since they broke the Truth in Lending Act and were unfair competition. A federal judge dismissed the class action, ruling that Capital One satisfies its obligation to be clear and truthful by stating that the rates and fees were subject to change. Capital One is able 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

An appeal is what made the Capital One class action lawsuit come back to life. A three-judge panel ruled that Capital One can’t represent that the rates are “fixed” if they are not. Rubio received, according to Reuters, a credit card offer in the mail from Capital One with a 6.99 percent rate in February 2004. 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. It also said “subject to change” while the agreement Rubio ended up with the next month said she could “amend or change any part” of the 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.

Citations

Courthouse News Service

courthousenews.com/2010/07/22/29062.htm

Reuters

reuters.com/article/idUSN2116752120100721