February 24, 2014

Capital One Stumbles Over Rules With 'Creepy' Debt Collector Policy

Credit card provider Capital One is caught in a vortex of its own this week a storm centered around language in its credit card contracts that implies it has the right to visit a customer's home to collect a debt.

The media jumped in, with the Los Angeles Times calling the visits "menacing and creepy."

After negative buzz in social media circles, Capital One issued a quasi-denial that it visited client homes to confront them over delinquent credit card debts:

We want to clarify what's been shared in recent news regarding information in our cardholder agreement about ways we can communicate with our customers.

Personal visits: Capital One does not visit our cardholders, nor do we send debt collectors to their homes or work. The one exception is the limited case involving secured collateral. We have card partnerships with several sports vehicle manufacturers (jet skis, snowmobiles, etc.), and as a last resort, we may go to a customer's home after appropriate notification if it becomes necessary to repossess the sports vehicle

Phone calls: We want our calls to display as Capital One on caller id and that's the way they are programmed. However, some local phone exchanges may display our number differently. This is beyond our control, and we want our cardholders to be aware of that potential occurrence.

This language is not new to Capital One agreements. The agreement was recently sent to a group of customers as part of the ongoing HSBC integration.

We are reviewing the language because we do not want to create any unnecessary insecurity among our customers.

This appears to be a misguided case of overreach by Capital One's legal counsel.

Yes, the visitation language does appear in consumer contracts. But no, Capital One doesn't have an arsenal of black helicopters and battering rams, and won't be showing up at your doorstep looking for the $100 you owe on a late credit card bill.

But the media fracas does have some merit for card consumers, who should always know what rights they have in protecting themselves from over zealous debt collectors.

Thanks in large part to the Fair Debt Collection Practices Act, passed in 1977 and amended in 1996, consumers have legal protection from what debt collectors can and cannot do when looking to collect delinquent payments.

According to the Act, debt collectors:

Cannot call you before 8 a.m. or after 9 p.m.
Can't call you at work (but you have to let them know calls to your workplace are not allowed.)
Can't call you multiple times in a day over a late payment.
Cannot abuse you verbally or use profane language in any conversations over a debt.
Cannot contact friends, co-workers or family members over a debt.
Cannot threaten to have you arrested over a debt.

If a debt collector ignores any of those restrictions, contact the Federal Trade Commission. The agency's consumer complaints page is a good place to start, or call the agency at 1-877-FTC-HELP.

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