Capital One is in trouble because they have yet again raised credit interest rates without informing customers. 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 there are 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 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 three and a half years and complying with the terms of the contract, lead plaintiff Raquel Rubio claimed her credit card rate of interest all of a sudden more than doubled.
Capital One has the right to change things
Rubio began the lawsuit against capital one since they broke the Truth in Lending Act and were unfair competition. Capital one does state they can change the rates and fees which is why the first judge dismissed the suit. Capital One can “amend or change any part of your Agreement, including periodic rates and other charges, or add or remove needs … 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. A three-judge panel ruled that Capital One can’t represent the rates are “fixed” if they are not. 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. In 10 point type in this offer, it explained that under certain circumstances, the interest rate could be raised. 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.”. Although none of the circumstances had happened, Rubio’s Capital One rate went in August 2007 to 15.99 percent.
More information on this topic
Courthouse News Service
courthousenews.com/2010/07/22/29062.htm
Reuters
reuters.com/article/idUSN2116752120100721
