Capital One Hit with Class Action Lawsuit Over Deceptive Fees

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Capital One Bank (USA) NA was hit with a potential class action lawsuit last week that accuses the company of deceiving customers about fees and conditions associated with the use of their zero-percent APR access checks.

Margaret Murr filed the class action lawsuit, alleging that Capital One created payment shortfalls in her account, making her pay fees that were in violation of her contract. She claims that when she attempted to pay her monthly purchase balances, Capital One put part of her payment toward the access check balance. This practice ensured that Murr would constantly owe interest on part of her account.

In the class action lawsuit, Murr accuses Capital One of engaging in a “bait and switch. Not only does Capital One charge the transaction fee, but through undisclosed practices, Capital One also manufactures payment shortfalls, which lead directly to increased interest charges, penalties, fees, and derogatory credit reports.”

Murr says that she received a promotional mailing from Capital One, which indicated that she could enjoy the zero-percent APR access check program for 12 months, as long as she signed up by November 4, 2012. Murr signed up for the program within the designated timeframe, thereby accepting Capital One’s zero percent APR offer.

“Nevertheless, as a result of accepting the 0% APR Offer, Plaintiff was charged and improperly incurred interest charges, late fees, minimum payment requirements, lost the interest-free grace period associated with her Capital One credit card, has been the subject of derogatory credit reports and suffered negative credit consequences, and has been harassed by debt collectors,” the Capital One class action lawsuit says.

By activating the zero-percent APR access check program, Murr was able to make balance transfers from her credit card account at a single 2 percent flat fee. According to Capital One’s advertisements, she would not be required to make any interest payments for 12 months. In October 2012, Murr used the zero percent APR access check program to make a payment of $4,360.

“Unbeknownst to plaintiff, Capital One had removed her grace period when she did not pay off her entire access check amount during the billing cycle in which it was utilized,” the class action lawsuit says.

Murr claims that Capital One took a portion of the payments she made towards the regular-purchase balance and put it into the balance transfer part of her account. Because the bank split the payment, she experienced shortfalls each month in her regular-purchase segment, causing to her incur interest fees. Murr also alleges that Capital One charged interest for the balance transfer during the 12 month grace period.

In the class action lawsuit, Murr accuses Capital One of breach of contract, unfair and deceptive practices, violations of the Arizona Consumer Fraud Acct and the Credit Card Accountability Responsibility and Disclosure Act of 2009. She is seeking restitution, damages, and declaratory and injunctive relief.

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

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

UPDATE: Capital One has tried twice unsuccessfully to have this class action lawsuit dismissed. In November 2013, a Virginia federal judge upheld the Capital One 0% APR class action lawsuit after agreeing to dismiss only one claim against the credit card giant. A follow-up motion to dismiss the Capital One 0% APR class action lawsuit but was denied again by the judge on June 27, 2014, who agreed only to dismiss two of the six remaining claims. The case continues.

UPDATE 2: 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 3: 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.