When banks go wrong part 5

The latest billing statement from Capital One (if it wasn’t so tragic it would truly be hilarious)

You’re behind by four payments. But you can still bring your account current by paying the minimum payment amount on your statement. Need help? Give us a call at 1.800.955.6600. We’ll work together to find a solution.

From the last time that I discussed one of these billing statements from Capital One, they had actually reduced the “account balance” about $100.00 to the “current balance” of $1,072.01.  Some tens of dollars above where they had set it at back in September 2009.  And a “minimum payment due” of $313.02.  Calculator time!  That would leave an account balance of $758.99.  Which had already been passed a long time ago by the better than $700.00 this last inactive account had already received before I discussed last month’s billing statement here on the blog.  With the latest $43.11 payment, this “account balance” would actually reduce to $715.88 considering that it was sent in the mail just prior to this statement being received.  You get the impression really, that Capital One Bank just has to have the former customer (myself) reworking old ground and basically repaying for payments they had already received.

Your account is designated to close. Continue to make payments until your balance reaches $0. Your account will close on the first statement after your balance reaches $0. Do not make any new charges on your credit card and stop any automatic payments or pre-authorized charges you may have set up on your account. If you use (swipe) your card during this time, we can consider this authorization to remove the close request and your account to remain open.

However, Capital One Bank makes a contrary statement at the top of the first page of this statement. “Your account is restricted.”

Your account is permanently restricted from future purchases and cash advances. But it’s not too late to prevent further damage to your credit. We want to help!

Really?  How many times LOL! would I have to make the argument that the account has been inactive and never used at all for going on five years?  That all I have been doing is simply making payments on it to fully pay it off?  Of course it is “restricted!”  And again a bank “so willing to ‘help'” [now] was the one that did permanent damage to my credit.

Consistent with new federal credit card rules, we’ve revised our policies on penalty fees and interest rate increases as well as the factors we may consider when increasing rates.

Actually, Capital one bank has not demonstrated much “consistency” with new credit card rules since September 2009.  After all, back in September of 2009, on an account balance of just a little over $1,000.00, Capital One Bank had set a “minimum payment due” of $160.00.  By October of 2010, with a current “account balance” somewhat higher than where it was last year, the “minimum payment due” is roughly double what it was last year.  Any other bank for the type of account balance that we are discussing here, would undoubtedly set a “minimum payment due” in the 40s of dollars.  Capital One Bank however, set the “minimum payment due” artificially high in September of 2009 so that it could “take advantage” (as described before) of changes in credit card rules.  And continue to “take advantage of them” even though they [found it necessary] to reduce late fees to $25.00.  (Total now stands at $362.00.)  That’s a lot of late fees.  Calculator time! This bank’s policy was to introduce these “late fees” because of the artificially high “minimum payment due” they set for this account balance.  Had in fact they engaged in normal practices [like any other bank] the “late fees” not existing for payments that they had certainly received on time for more than a year, would have reduced the existing account balance to $710.01 even with a permanent (not penalty) interest rate of 29.40%.  From the “minimum payment due” of $313.02 applied to this remainder $396.99 would have been about where my own calculations now place the future balance when the next $44.00 payment is sent by the end of October.  Interesting isn’t it?  A difference of about $10.00 between the two.  Can Capital One Bank really say that they are acting consistently with the laws?  Precisely, that they are engaging in normal practices much like that of other banks?  More factually, they continue a case of exploitation while making dishonest statements.

“Call us, we can help!”  Oh sure.

You were assessed a past due fee because your minimum payment was not received by the due date. To avoid this fee in the future, we recommend that you allow 7 business days for your minimum payments to reach Capital One.

Actually, Capital One Bank used this particular excuse to “drive up” account balances after the changes in credit card laws were passed in May of 2009 from June 2009 through August of 2009 in the excess of $500.00 so that they could also begin “charging” over-limit fees.  According to the law, they are forbidden to charge “late fees” period when the payments arrive “on time.”  For a bank to be consistent with the law, late fees are only for payments that arrive post the due date rather than continuously charged against payments that arrive before or on the due date.  It has occurred to me, since I complained to the OCC and the U.S. Justice Department about this, that the “minimum payment due” is primarily composed of “late fees” and “penalty interest rates;” there is no principle involved.  Meanwhile, because Capital One Bank has not been consistent with credit card laws, I have chosen to pay on a principle of where they had first established the account balance of somewhat over $1,000.00 with a 17% interest rate, consistently sent payments between $43.00 to $45.00 each and every month.  And since may of 2010, every two weeks.

Sorry, Capital One Bank, you aren’t following the law.  This customer protection law isn’t a smörgåsbord where you only reluctantly comply with some laws and willfully disregard others to try to take advantage of your customers (or former customers like myself).  For a bank to be fully in compliance, they must follow completely what the law does say.  Nor should this bank act exceptionally to what other banks ( with reference to the market itself) do.  Do bear this in mind, Capital One Bank isn’t engaging in normal operations.


5 Responses to “When banks go wrong part 5”

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