Judge Whittles Down Capital One 0% APR Class Action Lawsuit

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A class action lawsuit accusing Capital One Bank of misleading customers about the fees and conditions for its zero-percent APR balance transfer offers was trimmed last week by a Virginia federal judge, but most the claims remain against the credit card giant.

Lead plaintiff Margaret Murr alleges in the Capital One class action lawsuit that the company miscounted her credit card payments to create an ongoing balance on interest owed on her account after she used a paper check the company calls “access checks.” Murr refused to pay the fees from that transaction and she alleges that because of that, Capital One caused her credit rating to be lowered.

Last November, U.S. District Judge Leonie Brinkema denied a motion by Capital One to dismiss the class action lawsuit but agreed to dismiss Murr’s claims of breach of good faith and fair dealing under state law. Judge Brinkema ruled that the bank did not breach a covenant of good faith because under Virginia law, the bank did not have contractual discretions, and there was only a contract at issue in the class action lawsuit.

Capital One then moved to dismiss the remaining claims in the Capital One 0% APR class action lawsuit, which Judge Brinkema granted in part and denied in part on June 27.

Brinkema granted Capital One’s motion to dismiss claims under the Fair Credit Billing Act (FCBA), pointing out “[t]he FCBA was enacted to protect consumers against unfair and inaccurate credit billing practices by mandating billing dispute procedures for creditors to follow.”

The judge said the FCBA claim “comes up short because [the plaintiff] has not produced evidence that the defendant committed one of the billing errors enumerated in the FCBA.”

“The monthly billing statements plainly show that defendant billed plaintiff’s account according to what it thought proper based on her activities, albeit using a formula that plaintiff did not understand and that may have been deceptive,” explained the judge. However, “[b]ecause there is no evidence of a technical error – that is a miscomputation or other unintended charge – appearing anywhere in the record and plaintiff has not pointed to any authority suggesting that challenges to the propriety of the interest charges, late fees, and minimum payments satisfy the first element of an FCBA claim, summary judgement will be granted in defendant’s favor on this count.”

The judge also partially granted Capital One’s motion to dismiss breach of contract claims, holding “On one point, plaintiff’s claim can be resolved on summary judgment, and that is the argument that the Offer constituted an ‘implicit’ promise not to require any payment on the principal for the duration of the promotional no-interest period.”

“That claim is not supported by the record’ wrote the judge, “[t]he court will therefore decline the invitation to add a term – that defendant lent a sum certain for a set period of time without requiring any repayment of the principal – that does not appear in any contractual document.”

Class action claims for common-law fraud and constructive fraud, violation of the Truth in Lending Act, violation of the Arizona Consumer Fraud Act and declaratory relief survived the motion to dismiss.

The plaintiff is is represented by Daniel M. Cohen of Cuneo Gilbert & LaDuca LLP.

The Capital One Zero-Percent APR Class Action Lawsuit is Murr v. Capital One Bank (USA) NA, Case No. 1:13-cv-01091, in the U.S. District Court for the Eastern District of Virginia.

UPDATE: Capital One has agreed to settle the 0% APR class action lawsuit. Click here or visit www.CapitalOneZeroPercentSettlement.com for instructions on how to file a claim.

UPDATE 2: On Feb. 5, 2016, the Capital One 0% Settlement website announced that replacement checks were mailed on Dec. 18, 2015 to all Class Members whose original checks were not cashed. If you received a postcard check from the Murr v. Capital One Settlement Fund in August of 2015, that check is expired and a new check was mailed to you in December of 2015.