The tables have turned and now this bank will have to give you money. Capital One Bank is currently facing a class action lawsuit for improper practices and negligence. Going to the bank is a task dreaded by everyone, the long lines, the hidden fees, the excessive interest rates, it is all just a lot to cope with. One would expect that the least these financial institutions could do is ensure their systems are well maintained and always keep them running so that account holders can access their funds with ease. Sadly, this does not appear to be the case — at least not for clients with accounts at Capital One Bank.
The C in Capital One is for Class Action
On January 22, Plaintiff Daniel Zepeda filed a class action lawsuit against Capital One in the Eastern Virginia Federal Court. The lawsuit comes as a result of customers being unable to make any sort of transaction via their bank accounts with Capital Bank. This included a restriction to funds and an inability to process payments and receive direct deposits. This occurred over a period of several days during January and impacted thousands of customers.
The plaintiff’s lawsuit alleges that the bank had partaken in “negligence, breach of contract and unlawful conduct left its customers unable to access their funds and deprived them of the ability to purchase essential items such as food, clothing and shelter.”
The issue of restricted access began on January 15, and Zepeda hopes to represent Capital One clients who were impacted across the country.
An outage beginning on January 16 and ending two days later on January 18 majorly hindered customers from making and receiving payments. Zepeda also highlighted the fact that this outage conveniently occurred just as mid-month payments were due to come in for clients.
A breakdown of the suit
The plaintiff argues that this disruption of services caused customers “significant hardship and left them struggling to pay for essential needs such as food, rent, electricity and gas.” This is an argument that holds true since the impacted customers were not able to access the funds in their accounts, in addition to not being able to receive their mid-month payments.
Not being to pay monthly debit orders and other payments can cause a bit of a domino effect of additional costs. Banks tend to charge fees when debit orders do not process on time, whilst other recipients of payments would also likely charge a late fee if their payments are not received on time. The class action suit states that this issue is “further compounding the financial strain” on customers through no fault of their own.
As per the class action suit, Capital One is facing allegations of “breach of contract, negligence, conversion and unjust enrichment and of violating California’s Consumer Legal Remedies Act and Unfair Competition Law.”
The plaintiff who is represented by Glenn Chappell of Tycko & Zavareei LLP, is fighting for a trial by jury and has made a request for injunctive relief. The class action also aims to award class members with actual damages, interest for late payment, and restitution.
This class action suit is still in the early stages and it remains to be seen if Capital One will admit to the charges and what kind of settlement amount will be granted to class members.
The Consumer Financial Protection Bureau has also filed a lawsuit against the bank earlier this month. The suit alleges that the bank had been cheating its customers out of their interest earnings from their savings accounts. It is alleged that consumers have potentially lost out on a collective $2 billion in interest earnings due to malpractice by the bank.