Appeals court rules deceptive lending class action can move forward
The U.S. Court of Appeal for the 9th Circuit has reinstated a class action lawsuit brought against banking giant Capital One for unfair competition and deceptive lending. The charges are based on the company offering a “fixed rate” on credit cards without giving consumers clear and conspicuous warnings that the rate was subject to increases.
The lead plaintiff brought the class action because of a Capital One MasterCard offer with a fixed APR of 6.99 percent. The offer stated that the rate could go up under three conditions: charging over the card’s limit, failing to make a payment, or having a payment returned. But in spite of complying with these terms, her rate increased to 15.9 percent. She then sued the bank for violating the Truth in Lending Act, breach of contract, and unfair competition.
The trial judge dismissed the case on the basis that the disclosure stated that rates and fees were subject to change and that Capital One reserved the right to change the terms of the agreement. The appellate court disagreed, ruling that the bank cannot represent to consumers that rates are “fixed” if they are not.
For the full story, go to CourtHouseNews.com.