Capital One Charged with Illegal Debt Collections in Class Action Lawsuit

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Sep 29, 2012

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A rising trend of consumer lawsuits against credit card companies has been underway for a few years. With many Americans tightening their wallets, unpaid bills can give way to aggressive collectors. The most recent credit card company under fire is Capital One, who may be taking measures too far to find out, “What’s in your wallet?”

A federal class action lawsuit has been filed against Capital One and the Law Offices of Cohen and Slamowitz, the company’s legal counsel. Capital One is being accused of employing unlawful credit and collection practices that allegedly violate the Fair Debt Collection Practices Act.

The suit, filed in New York, was brought by attorney Shimshon Wexler, and undertaken on behalf of “all individuals with a New York address who have had an action filed against them in a Supreme Court of the State of New York for a consumer debt(s) for less than $3,000,″ according to an ABC news report.

Capital One is being accused of such Fair Debt Collection Practices Act violations as contacting debtors at work and sharing debtors’ names or addresses in so-called “bad debt” records, violations of provisions specifically laid out in the Act. Read more about debt collection violations here.

The Fair Debt Collection Practices Act (FDCPA), part of the Consumer Credit Protection Act, states that “a debt collector may not communicate with a consumer in connection with the collection of any debt — at the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.” If the class action Plaintiffs’ employers had such policies to prohibit communication, and it is proved that Capital One did so anyway, the company could be found guilty of this FDCPA violation, and likely made to pay restitution to the customers involved and penalty fines.

In previous litigation against Capital One that ended in July, 2012, the company was required to reimburse $140 million to two million customers for deceptive marketing. Capital One representatives were accused in this case of misleading customers into paying for products like payment protection, and other products and services that were both confusing and/or unnecessary.

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