Lawsuit claims that Capital One engages in unfair and bad faith business practices with respect to its unilateral increases in the interest rates charged to consumer credit card accounts.

Atlanta, Ga. (PRWEB) August 14, 2009 — Atlanta attorney E. Adam Webb has filed a class action lawsuit against Capital One Bank alleging that Capital One has operated in bad faith by unilaterally increasing the interest rates on consumer credit card accounts. Capital One has raised rates even for consumers who have always maintained their good standing by satisfying all account requirements, such as making all required payments and not exceeding credit limits. Furthermore, Capital One has taken such action even against those whose credit scores and general creditworthiness have not declined. The suit claims that Capital One, which is headquartered in McLean, Virginia, has engaged in improper and unfair practices in order to increase the revenue it generates via the interest rates imposed on consumer credit card accounts. The case, styled Lemond v. Capital One Bank (USA), N.A., is pending in the United States District Court for the Northern District of Georgia and has been assigned Case Number 1:09-CV-01582-RWS.

According to the suit, Capital One raised the interest rates associated with credit card accounts by over nine percent even though accounts were in good standing and had been at all relevant times. Although Capital One did not purport to impose these new higher rates on balances accrued prior to its notice to consumers, the effect is the same because of the Bank’s practice of crediting all payments to the portion of the account balance with the lowest interest rate. In addition, the suit alleges that Capital One’s offer that customers could reject this interest rate increase by closing their credit card accounts is inadequate because, as Capital One is well aware, closing a credit line has a negative impact on a consumer’s credit score. A lower credit score can cost a consumer thousands of dollars over the term of a home mortgage or other loan. As a result, customers have been forced to accept Capital One’s unilateral rate increases.

The Plaintiffs allege that Capital One is liable for all damages that have resulted from its bad faith and improper conduct, to include the differential in interest payments paid by the class members to Capital One.

If you wish to discuss this action or have any questions concerning this press release, please contact E. Adam Webb., Esq. by e-mail at contact(at)webbllc(dot)com or by calling (770) 444-9325.

However, my 7.99% fixed rate is going to 16.49% variable. If you call 1-800-889-9939 you can talk to an “account specialist,” who may or may not be able to fix this. I’m going to talk to them tomorrow. Every few years, Capital One tries to pull a fast one like this, and usually backs down when I call them on it. If they don’t back down this time, I’ll draw down my full $10,000 credit line as cash and close the account (so I can pay it off under the existing terms). 7.99% isn’t a bad rate for an used car auto loan right now, and I plan to buy a van anyway. :)

Mr. LoBiondo –

Please refer to the following website regarding recent actions taken by Capital One Bank in announcing a unitlateral decision on its part to significantly raise the interest rates on the credit card accounts of its customers after accepting signififant TARP funding.

http://www.consumeraffairs.com/credit_cards/capital_one.htm

My notice from Capital One advised me that “Due to extraordinary changes in the economic environment”, as of April 17, 2009 my interest rate will increase from the current rate of 5.06% APR to 13.9% (a 174% increase). This is being done despite the fact that I have never been late, have never exceeded my credit limit, always pay more than the minimum due and have a credit score in the upper 700’s.

I certainly don’t expect you to spend your valuable time addressing my specific dilemma as I am just one person directly affected by this action by Capital One. However, as evidenced by the information at the link provided, there are surely countless other constituents of yours similarly and adversely impacted by this action and possibly similar actions by other credit card issuers. On behalf of all of them, and myself, I would respectfully urge you to have Congress assess the justice in a situation whereby citizens, as consumers, are unilaterally and without recourse, mandated by a financial instution to pay them substantially more while, concurrently, that same financial institution receives, and gladly accepts, 3.5 billion dollars in relief from those same citizens as taxpayers.

Unfortunately, “we the people” do not enjoy the ability “due to extraordinary changes in the economic environment” to make self-serving, unilateral decisions that solely benefit us.

It seems really strange to raise credit card rates when interest rates have dropped. I think it is also unfair to ask credit card users to make up for problems in the mortgage market. We are no longer using credit cards but still have a sizable balance to get rid of.

First is that basically the APR is doubling. Second is that it is becoming variable. This means as the mortgage business continues to head south your variable rate could hit the roof.

I canceled my card by the way. I can see robbery when it is staring me in the face.

seems that capitol one can’t keep charging below prime for a long time, so the rate increases seem like a natural progression. that just goes to show you that you need to read your monthly statements for any kinds of changes, and second that cc companies can change terms any time.

They raised his rate from a fixed 8.99% to a variable rate of Prime + 7.5% or something, effectively doubling his rate on purchases. He called and spoke with a CSR and supervisor. He said the supervisor sounded a litte flustered and indicated he had been getting a lot of calls on this issue.

In the end he got the rate back down to 7.99% which he was happy with. He has had the card for 4 or 5 years, and did’t really want to get a new card even for 0% on purchases.

He had a sweet offer in the same mail in his wifes name for a 0% transfer for 15 months on a Chase Platinum card with a $99 BT fee cap. I couldn’t figure out any way to use this offer myself as it was a targeted invite. Any ideas?

Cheers