Kohl’s, Capital One Hit With Class Action Over Deceptive Credit Card Fees

Kohl’s Corporation and Capital One Financial Corporation were collectively hit with a class action lawsuit in a Pennsylvania federal court for allegedly engaging in deceptive practices when advertising for fee-based credit card protection services for Kohl’s credit cards.

Plaintiffs Jennifer Gordon, Valerie Tantlinger, and Jennifer Underwood claim in the Kohl’s class action lawsuit filed Feb. 13 that Kohl’s and Capital One “engage in unfair and deceptive practices with regard to Payment Protection” and their Privacyguard services.

Kohl’s and Capital One have a private-label credit card partnership together, the class action lawsuit explains, “which includes profit-sharing for the sale of ancillary credit card products and fees.”

The alleged deceptive practices include “enrolling and/or charging customers without their express permission, express informed consent, or express agreement,” which is also called “slamming.”

In addition, the Kohl’s credit card class action lawsuit charges Kohl’s and Capital One of “enrolling consumers into and/or charging consumers for a product with little or no value; and/or overcharging consumers for payment protection.”

Kohl’s and Capital One allegedly “marketed and/or imposed Privacyguard — for which customers made monthly payments — as a product that purports to ‘protect’ consumers’ identity, ostensibly through credit monitoring and credit report retrieval services.”

Payment Protection is like an insurance policy that is supposed “to cancel a consumer’s account balance, up to a certain dollar amount, in the event of a qualifying event due to involuntary unemployment, disability, hospitalization or death, provided that the accountholder continues to make at least the minimum monthly payment due on their account.”

Kohl’s and Capital One charges $1.60 per $100 of the ending monthly balance per month for Payment Protection and $14.99 per month for Privacyguard.

These charges are described as “Kohl’s Account Ease” services on credit card statements.

However, the problem is that customers are allegedly enrolled and charged for this service without their consent, as explained above.

According to the Kohl’s credit card class action lawsuit, what makes this practice “particularly egregious [is] that they fail to inform consumers that these products are optional, may be cancelled at any time, are not required for consumers to activate or use, or to continue to use their card.”

The plaintiffs further allege that once the Kohl’s credit cards are cancelled or the ancillary products are cancelled, Kohl’s and Capital One’s response is to bill the customers for these products or they “file negative reports on their credit reports, lowering the consumers’ credit scores.”

Kohl’s and Capital One have allegedly violated various state and federal laws through their deceptive practices, the class action lawsuit alleges.

However, this is not the first time that Capital One has faced charges for such alleged deceptive practices.

In 2012, Capital One was ordered to pay $210 million by the government’s Consumer Financial Protection Bureau for allegedly tricking credit card customers into buying unwanted “add-on” products such as payment protection.

In 2010, Capital One agreed to a class action settlement over allegations it made the process for obtaining benefits under its Payment Protection too difficult.

The plaintiffs are represented by Patrick Howard, Charles Kocher of Saltz Mongeluzzi Barrett & Bendesky PC and Lee S. Shalov and Wade C. Wilkinson of McLaughlin & Stern LLP.

The Kohl’s Credit Card Class Action Lawsuit is Jennifer Gordon et al. v. Kohl’s Corporation et al., Case No. 15-CV-730, filed in the U.S. District Court for the Eastern District of Pennsylvania.

UPDATE: On March 2, 2016, an attorney for Kohl’s and Capital One asked a federal judge to toss a proposed class action lawsuit that was filed against the companies collectively by consumers.
UPDATE 2: On March 12, 2019,a $1.8 million settlementwas proposed to resolve claims that Kohl’s and Capital One deceptively charged consumers for credit monitoring.

Join a Free Kohl’s Credit Card Fees Class Action Lawsuit Investigation

If you were billed for Kohl’s Account Ease and/or PrivacyGuard on your Kohl’s credit card from February 2011 until the present, you may qualify to participate in this class action lawsuit investigation. Get help now by filling out the form on this page for a FREE case evaluation.

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