A woman in Pennsylvania has filed a lawsuit against Capital One after a dispute over a few thousand in credit card debt spiraled out of control until, she alleges, it culminated in the credit card company sending her a letter demanding the immediate payment of more than $286 million.
According to the lawsuit, the woman had originally received a notice from Capital One regarding a balance of around $3,800 on her account. She claims she disputed the charges and referred the company to her lawyer.
The suit alleges that Capital One disregarded this request and continued to contact her and her family members about the debt. After receiving further statements and demands for payment, the plaintiff says she eventually received notice that she owed Capital One $286,651,237 and was to remit payment immediately.
The plaintiff’s lawyer believes that the $286 million amount was not a computer error but was an attempt to “shock and intimidate” his client and destroy her credit standing.
The suit also alleges that Capital One filed suit against the plaintiff but that no one from the credit card company showed up at the hearing.
Says the plaintiff’s lawyer in a statement to Consumerist:
Harassing calls, disregard for a lawyers written instructions on two occasions, demands for payment of differing and arbitrary amounts and the final letter seeking more than $286 Million, demonstrates serious abuses at the collection office of Capital One… From this example we see how a financial terrorist works in today’s economic times and that is by escalating tensions, pushing the person to the limit, and making threats, without regard for civility, accuracy or the legal rights of the individual. No one should ever suffer the indignity and humiliation my client has experienced.
When reached for comment, a rep for Capital One tells Consumerist:
As a matter of policy, we don’t discuss the details of pending legal matters.
However, there are very rare occasions when human error has led to inaccuracies in a customer billing letters. This is clearly one of those instances.
We understand, and sincerely regret, the confusion that receiving an invoice of this size must have caused. We are working to resolve this issue.
What’s in Your Wallet? [Courthouse News]
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Sounds like she has a great FCRA lawsuit on her hands, I’ve read accounts where people who have been harassed by banks like this have walked away with as much as 1.5 million.
That doesn’t even make a dent in what she owes….
The FCRA and FDCPA don’t generally have teeth against the original creditor
Assuming that it was some kind of error that generated the $286M letter, Capital One is still screwed here.
Once she notified Capital One that she had an attorney representing her, they can’t keep contacting her. They must work through the attorney. Continuing to go after the debtor in this scenario is an FDCPA violation.
On the upside, this woman should be able to get enough in FDCPA violation fines out of Capital One to pay off the debt plus legal fees.
And since someone will ask for it, here are the relevant sections of the FDCPA:
§ 805. Communication in connection with debt collection
(a) COMMUNICATION WITH THE CONSUMER GENERALLY. Without the prior consent of the consumer given
directly to the debt collector or the express permission of
a court of competent jurisdiction, a debt collector may not
communicate with a consumer in connection with the collection of any debt—
(2) if the debt collector knows the consumer is represented
by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name
and address, unless the attorney fails to respond within
a reasonable period of time to a communication from
the debt collector or unless the attorney consents to
direct communication with the consumer;
§ 813. Civil liability
(a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title
with respect to any person is liable to such person in an
amount equal to the sum of—
(1) any actual damage sustained by such person as a result
of such failure;
(2) (A) in the case of any action by an individual, such
additional damages as the court may allow, but not
exceeding $1,000; or
(B) in the case of a class action,
(i) such amount for each named plaintiff as could
be recovered under subparagraph (A), and
(ii) such amount as the court may allow for all
other class members, without regard to a minimum individual recovery, not to exceed the
lesser of $500,000 or 1 per centum of the net
worth of the debt collector; and
(3) in the case of any successful action to enforce the
foregoing liability, the costs of the action, together with
a reasonable attorney’s fee as determined by the court.
On a finding by the court that an action under this
section was brought in bad faith and for the purpose
of harassment, the court may award to the defendant
attorney’s fees reasonab
Does that apply to the original creditor or just to third party debt collectors that the debt was sold to?
As a separate issue:
In general (not in debt situations) if you have a legal dispute with someone, their lawyer isn’t allowed to contact you once you have told them to talk to your lawyer, but the person you have the dispute with can contact you (unless a specific law or injunction overrides that rule).
FDCPA applies to third-party debt collectors, not to first-party debt originators. If Capital One had sold the debt to Lousy Debt Collector, Inc. then it would be a FDCPA violation, but since Capital One originated the debt, they aren’t constrained by the FDCPA.
Depends on the state. Many states have particular laws that extend FDCPA protections to original creditors.
My experience with Capital One was that they never directly collected their own debts. Even though they say they’re from Cap One, they’re a separate agency, bound to the FDCPA That may have changed in the last 10 years, but it was true back in the early 2000s.
Regardless, even a first party creditor has to comply with someone represented by counsel.
Oh I agree on the part where they’re contacting her instead of counsel, they should rightly get creamed for that one (and the attorneys involved probably will have some ethics issues with their state bar).
Yes, if you’re a lawyer and you learn that a person is being represented by a lawyer, you cannot contact them directly anymore, you must go through their lawyer. There are limited exceptions, but I doubt any of them apply here. This is the ethics rule in most/all states.
I believe in California FDCPA applies to original creditors. Not all states have this rule though…
But I do believe that Capital One has their own collections agency. Separate company but same name.
They are using the Pennsylvania version of the FDCPA.
In college, I had a credit card with Capital One. The card had a limit of $500 (which I promptly used up on schoolbooks one semester).
Thru a combination of poor financial management on my part (read: forgetting to pay the bill) and paying only the minimum, the balanced ballooned to over $2k. I did pay it off, years later, and closed the account. I wouldn’t put it past Capital One to try to scare this woman into paying off the balance…but it sounds like this letter was definitely just an error on somebody’s part.
So you’re saying you wouldn’t put it past Capital One to scare the OP because you let your $500 debt turn into a $2,000+ debt?
The only thing they didn’t say is they’re taking it seriously.
I’m surprised they owned up and said it was an error on their part. Feels like they are somewhat human at Capital One.
Human once the press gets involved.
Well if there options are claim it is an error or claim they were trying to intimidate the lady it’s easy to see why they chose “claim it’s an error”
If it was indeed an error, there should be no problem reversing the $286 million, but Capital One should be charged interest for the period in which they erroneously charged the woman’s account. I think 19.99% apr is an appropriate rate.
These days, 24.9% sounds more reasonable.
But they defaulted, so 29.99% ;-|
That’s a bit too much human error (the calls, ignoring the lawyer, the overbilling) for me to believe this was an honest mistake. This is incompetence. I have been thinking of getting a travel rewards credit card… not really feeling that Capital One Venture One card I had been considering.
They are in a lawsuit and someone admitted that they made a mistake? They are pretty honest, by the standard of banks I think.
No, they are saying they made an error because the alternative is to admit they were slimy.
My favorite quote from the official complaint filed with the court: Capital One’s advertising slogan “what’s in your wallet?” is promoted across the media, including television, radio and internet, trumping (sic) the value of its product.
Capital One apparently wanted to know not only was in the Plaintiff’s wallet (sic), but intended to empty her wallet as well.”
Oh, and that complaint could have been proofread before its submission as an official document…just saying.
“Harassing calls, disregard for a lawyers [sic] written instructions on two occasions, demands for payment of differing and arbitrary amounts and the final letter seeking more than $286 Million, demonstrates [sic] serious abuses at the collection office of Capital One”
Doesn’t surprise me there are glaring grammar errors in the suit, given that the lawyer’s statement to Consumerist has two obvious errors (failure to properly use the possessive and subject/verb agreement problem).
Oddly enough, that use of trump is correct, if obsolete: “To proclaim, celebrate, or extol by, or as by, the sound of a trumpet” (Oxford English Dictionary).
I believe the word they were looking for is, indeed, trumpet…the verb form of it, to be specific. I understand that trump may be an antiquated form of the verb, but I highly doubt that the lawyer drafting the document would purposively make that distinction.
Actually, if you want to think of it in another way, “trump” is indeed (and snarkily) correct.
The catchy ads trump the poor product and service. Unfortunately. Should be the other way around, really.
Oh, and I like the amount of damages being sought: “Damages equal to amount sought by Defendant from Plaintiff ($286,651,237.00).”
That is funny. They’ll never get it, but I like their gumption.
Apparently her state has a statute that allows someone sued to countersue for the amount sought by a plaintiff who fails to appear. That’s what she’s doing, and why the number is so large.
kind of unrelated, but from reading the lawyer’s repsonse…
Has anyone feel like the word “terrorist” is really watered down these days? everything and everyone is a terrorist.
Next thing we know we are going to have bathroom terrorist who pees outside the urinal. the road terrorist who cuts you off. the dinner table terrorist who critics your roast beef.
And the grammar terrorist who critiques your spelling of ‘critiques’
They could be a time traveller from the 18th century when critic was used in that fashion.
I think I would feel terrorized if my $4K balance became almost $300 million. But I agree, it’s over-used.
“Has anyone feel like the word “terrorist” is really watered down these days?”
You are a HERO for having the guts to say that.
I agree that the term is overused and watered down these days, but in the case of Capital One, terrorist is is probably the most appropriate description.
I think you meant “critiques the roast beef,” butt I suppose that would make me a Grammar Terrorist.
Clearly the word terrorist, since 9/11, has a tremendous affect on us as Americans, and typically gets our attention.
Here, they are outright criminal enterprises perpetuated by government regulations which encourage their underlying purpose- to generate $.
Legislators know damn well what is going on. Remember when they said there was going to be credit card overhaul? Yeh, well look at how we as credit card holders have gotten an even worse deal than before the legislation. It’s insanity via DC.
Capital One tried to do this with me. Their collection agency tried to get me to keep paying endlessly past when I paid off the debt and when I called them on it, they disappeared.
This is why Vikings should not be running a company. They screw up the paperwork. It’s always pillage and rape, rape and pillage. Burn, Burn, rape, pillage and burn. They know nothing of due diligence.
And there’s not much incentive for them to clean up their act if people submit and don’t get legal help. The credit card people know full well they can get away with lots of things if no one finds out and no one can ever go to jail since they are a corporation.
Rule #1: Pillage, then burn.
“When will they ever learn?
Plunder before you burn.”
~ Where Have all The Vikings Gone
Actually, I was thinking “The Seven Habits of Highly Effective Pirates”, a la Schlock Mercenary …
They’re visigoths actually.
Vikings? I thought they were a group of “bears” who were hired out of a Gay Pride parade.
Here… Let me just write you a check!
That check would be worth the overdraft fee. Only if it was drawn from a Capital One checking account.
OTOH, where the hell do they think $3800 can magically turn into $286 million over the course of a few years (I am assuming the timeframe here)? Whatever fund that is, I have a 401K that’s done essentially nothing for the past few years to invest in it.
I hope she wins 287 Million from Them.
I wonder if the customer service rep she worked with is named Peggy….
can’t imagine with vikings as their customer base they’re profiable
Haha I work at that location. That photo is definitely outdated as it’s no longer the ugly teal/gray and the nicer blue/red.
It sounds like they wanted to tack on legal research fees of $286,651.237 maybe because of the legal contact from credit consumers lawyer. but exposure brought all that crashing down possibly.
That’s one hell of a dream team eh?
$286 mil…clerical error? Sue their asses off. The entire credit card industry are legalized loan sharks, only WORSE. They are criminal operations that the government has enabled to continue. No one can dispute this fact.
Don’t forget that Capital One did not just send a letter demanding $286m. They actually SUED this person. As in, they fucking filed a lawsuit with the court. And failed to appear.