UPDATED: 2/19/2014, 1.10 p.m.: Edited to add initial statement from Pam Girardo, spokeswoman from Capital One, regarding how long Capital One had used language about in-person collections in its credit card terms and conditions.
It’s pretty likely this is the fifteenth article you’ve read about Capital One and its credit card terms and conditions. From a spark in the LA Times’ business section, the story flared into a thousand email forwards, usually accompanied by a hasty, “Can you believe this–” …stuff.
According to a variety of sources, Capital One is preparing to launch a team of suited collectors to visit people’s homes and offices in pursuit of missed credit card payments. The LA Times put it this way: “Credit card issuer Capital One isn’t shy about getting into customers’ faces. The company recently sent a contract update to cardholders that makes clear it can drop by any time it pleases.”
This is a textbook story of Public Perception Journalism. It’s an off-shoot of other terrific movements, like the Court of Public Perception and Uncle Kevin’s a Libertarian. What happens is: someone reads something in haste, writes about it in haste, and it’s published in haste — all without the benefit of consideration or logic.
For instance, there’s this: the language in that Capital One agreement isn’t new. If you look back at previous iterations of its contracts, you’ll see that Capital One has always granted itself the right to stop by for a quick chat. In an email exchange between insideARM.com and Capital One spokeswoman Pam Girardo, she said, “We recognize that our agreement may have generated some confusion about our actual practices, so we are reviewing our language. That language has been in our card agreements for years.” [Quote added 2/19/2014, 1.10 p.m.]
However, it does not use that leverage for missed credit card payments. (More on that in a moment.) As Capital One has stated repeatedly in the wake of this panic: “As a last resort, we may go to a customer’s home after appropriate notification if it becomes necessary to repossess…sports vehicle.” That was Capital One spokeswoman Pam Girardo. I bet Pam is pretty tired of her email and phone right about now.
How and why did this story flare up? Partly because of Capital One’s purchase of HSBC’s credit card unit. Capital One sent those customers the new, to them, terms and conditions of being a Capital One card holder. Someone read through the whole disclosure — someone not me, or, probably, you: because no one reads those disclosures really in the first place — and, because of the provocative nature of the statement about when and where it could collect its debts, the story caught hold of the public’s imagination.
This is not to suggest that the language itself isn’t problematic. While Capital One has said that language is only intended for its repossession efforts — the language itself doesn’t say it’s only for repossession purposes. Capital One, through its terms and conditions, is allowing itself the chance to stop by a home or office, ”Unless the law says we cannot…”
That ”Unless the law says we cannot” clause has been left out of a lot of media coverage about this, and it’s sort of an important bit of legalese. Capital One is saying that it can’t go above and beyond the law.
Of course, all of this may be moot anyway. Thanks in part to the increased scrutiny, Capital One is now saying that it is revisiting that language in its credit card Terms and Conditions. Additionally, though not stated explicitly: since banks are now firmly under the purview of the CFPB, that may also be providing the impetus for more consumer-friendly language in the Terms and Conditions.
So, to recap:
The language in Capital One’s credit cards Terms and Conditions is not new, is not explicitly limited to repossession efforts, and may not be in its next iterations.