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Boy, we sure love Capital One here at creditinfocenter.com. Like a politician who is constantly having affairs or accepting big bribes, they provide us with lots to write about.

The latest? The West Virginia Attorney General, Darrell McGraw, is suing them for deceptive practices in both lending and collection practices. According to the press release issued by the attorney general’s office:

… unfair and deceptive acts and practices, unlawful debt collection practices, and unconscionable conduct in connection with their credit card lending and collection practices….

… Capital One solicited consumers to enter into debt repayment plans by sending them solicitations that were disguised as offers of new credit. The offer was sent to consumers who had charged-off accounts with Capital One or other creditors. Under the terms of the offer, Capital One agreed to provide the consumer $1.00 of new credit in exchange for the consumer’s agreeing to transfer the entire account balance of a charged-off account to the new credit card account.

Consumers were required to make payments on the old debt in order to receive any further increases in the credit limit on their new credit card. By transferring the old debt onto a new credit card, Capital One was able to charge interest, late fees, and over-the-limit fees on debt that otherwise would not have been subject to those fees.

The lawsuit is the latest in a 5 year battle between McGraw and the credit card company. The story makes for a great soap opera:

1. McGraw received 264 complaints about the company, leading to the issuance of subpoenas in April 2005.
2. In 2007, the Honorable Judge Hoke, Circuit Judge of Lincoln County, ordered Capital One Bank and Capital One Services to provide the requested information.
3. Capital One Bank changed to a national bank.
4. Capital One appealed the ruling to comply with requests for information. Their argument: Capital One Bank’s change to a national bank meant the bank could only be regulated by the Office of the Comptroller of Currency.
5. Superior court ruled for Capital One.
6. McGraw dropped the suit.
7. In 2008, McGraw filed a motion in U.S. District court to force Capital One into complying with his investigation. The request was granted.
8. In January 2009, Capital One filed a motion to overturn the Circuit Court’s decision to allow the investigation, and this request was denied. U.S. District Judge Joseph Goodwin said Thursday that McGraw’s investigation was “hijacked” but ruled he could still probe Capital One Services.
9. On January 22, 2010, McGraw filed his new lawsuit.

Have you had your own run in with Capital One? Tell us about it by leaving a comment!

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