November 11, 2001 - If you have a
Capital One credit card,
then I highly recommend you read this entire article!
I just received a letter from Capital
One informing me that "enclosed is an important legal notice
regarding arbitration" and I need to "read the entire
notice to fully understand its implications" to my account.
This isn't the easiest reading by the
way. It's a legal notice, written in legal language at the college
graduate level. Quite different than the 6th-grade level credit offers
they send me trying to get me to use my credit lines.
Here's an example from the
arbitration letter: "The arbitration of any Claim must proceed
on an individual basis, even if the Claim has been asserted in a
court as a class action, private attorney general action or other
representative of collective action."
Oh yeah, makes perfect sense to me.
Here's an example of the writing
that's meant for me to easily understand (from a credit offer):
"One of the attached Purchase Checks is
already made payable to you. Consider using the other check to
purchase something you've always wanted. It's that easy!"
Gee, I can understand that no problem.
Why the difference in writing style? Could it be that in one case
it's meant for me to be confused and in the other they want me to
spend money on my credit lines? Could it be that both cases are
written to work in Capital One's advantage? We both know the answers
to those questions.
Here's the bottom line on this
arbitration letter: if you do not reject the Arbitration Provision
then it becomes part of your account. It's a "negative
offer" similar to the music clubs that automatically send you
the "CD of the Month" unless you tell them not to send it.
So what's the Arbitration Provision?
It means that if you have a dispute that's listed in what they
consider to be a dispute, the matter is taken to an impartial
person, or group, to be resolved. Of course, you can choose your arbitrator--from their list.
It means that if you allow this
provision to become part of your agreement you will not have the
right to take your claim to court or participate in a class action
lawsuit. And it may cost MORE to go to arbitration, probably because
your attorney's fee could be covered for many claims, like say a
class action lawsuit.
You may ask why it's important retain
First of all, I don't want to give up
any rights unnecessarily, but more importantly is that although we
are only going to recover pennies in a class action lawsuit, it's
still in our best interest to be a part of these cases. Sure, the
lawyers get all the money, but these lawsuits are one of the best
defenses to keep the banks in check. It reminds them that they need
to obey the law or they'll pay!
Here is a list of some of what
they'll consider a "claim" (dispute you have with them or
they have with you):
||Transactions or attempted
transactions on your account.
||Any billing or collection matters.
||Any fees, interest, or their calculation.
||Any products, services, or benefits programs in connection with
your account (any insurance, rebates, rewards, etc.).
||Any posting of transactions (including payments and credit) to
I called their contact number in the
letter to ask questions but only connected to their recording system
that delivers answers based on a phone menu. In others, words, I
couldn't reach a human--no surprise there.
I would urge you to STOP the
Arbitration Provision from becoming part of your credit card
agreement! I don't see it as being in our favor at all! If you have
a Capital One account and accidentally threw out that letter, listen
to the recording at 1-888-578-5462 to learn how to reject the
Here's the general rule: When
businesses spend money to send you an offer it's usually in their
best interest and probably not yours. There are exceptions; however;
I always approach all offers with a level of skepticism.
I have received term changes from
other credit card banks which, if rejected, mean that the account is
closed. The only consequence of rejecting the Arbitration Provision,
which I saw in the letter, is that it doesn't become part of your
Let's look at this from Capital One's
point of view. They're lending money to many people who are
going to stiff them in bankruptcy court. I can understand why they
need to protect themselves, however, they must treat us "DebtSmart"
customers with respect. We are their best clients, and we need to
stick together to show all the banks who's really in control--who's
paying their salaries!
Don't give up any of your rights!
To reject the Arbitration Provision
you must follow the detailed directions for completing the
"Arbitration Rejection Coupon" that accompanies the
Although I feel like they are trying
to pull a fast one here I still like Capital One and recommend their
credit card because the interest rates are generally lower than
other credit cards. In their defense, on this Arbitration Policy
change issue at least they indicated all the salient information in
bold print on the envelope and in the letter.
By the way, the deadline for reject
the Arbitration Provision is 1/31/02.