February 18, 2010
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News: Capital One To Repay $775,000
Over 18,000 credit card customers will soon get a check in the mail from their former credit card company. Capital One Financial Corp has agreed to repay the cardholders the annual fee they were charged after they closed their credit card accounts. The total the bank will be reimbursing amounts to nearly $775,000 after regulators found the fees to be unfair. Jointly, the Office of the Comptroller of the Currency (OCC) and attorney generals from California and West Virginia said that Capital One was in error when the bank charged customers an annual fee after the customers had paid off their card balances and closed the accounts.
Although Capital One was only required to refund fees to approximately 3,400 customers, the bank agreed to also refund an additional 15,000 credit card customers who had closed their accounts and paid the account balances off within 90 days. The bank had defended the charges by saying that accounts remain open for one month following the customers' request to allow time for all transactions to be accounted for. According to a company spokesperson, many of those credit card accounts fell within the last billing cycle of the accounts anniversary. Although Capital One reimbursed any customer who claimed, they willing accepted those that paid the fee without question.
Since Capital One expanded its operations to include banking in addition to its credit card business, the company has fallen under the strong arms of the OCC. It is speculated that the decision to expand its operation was due in part to the massive card losses during the economic crisis. The move seems to have proven successful as the company generated $312 million in profits during 2009 compared to the $79 million it lost the previous year. Capital One is headquartered in McLean, Virginia. The company is traded on the New York Stock Exchange under the symbol "COF."