Research and Statistics

Capital One edits language allowing visits at home or work


Capital One said it is dropping language in its general purpose card agreements allowing visits at home or work, but keeping those rights in store cards for now

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Capital One is deleting terms that give it the right to visit cardholders at home or at work from its company-branded credit card agreements.

The revised language is going to new cardholders now and will be updated in card agreements for existing cardholders over time, company representatives said.

In addition to its branded cards, Capital One backs cards from 21 partners including Costco, Big Lots, Neiman Marcus and Furniture Row. The partner cards will keep the current language allowing visits for now, but the card issuer said it expects to delete the language from these cards as well, over time.

The store cards also contain a security interest clause, which allows repossession of items that you buy with the card until they’re paid off.

Capital One is the third-largest issuer of store cards, with about 21 million active accounts, according to a 2012 analysis of the market by The Nilson Report, an industry journal.

Old, new terms in Capital One contracts

Old: We may contact you from time to time regarding your Account. We may contact you in any manner we choose unless the law says that we cannot. For example, we may: contact you by mail, telephone, email, fax, recorded message, text message, or personal visit; contact you using an automated dialing or similar device (“Autodialer”); contact you at your home and at your place of employment; contact you on your mobile telephone; contact you at any time, including weekends and holidays; contact you with any frequency; leave prerecorded and other messages on your answering machine/service and with others; and identify ourselves, your relationship with us, and our purpose for contacting you even if others might hear or read it. Our contacts with you about your Account are not unsolicited and might result from information we obtain from you or others. We may monitor or record any conversation or other communication with you. Unless the law says we cannot, we may modify or suppress caller ID and similar services and identify ourselves on these services in any manner we choose. When you give us or we obtain your mobile telephone number, we may contact you at this number using an Autodialer and can also leave prerecorded and other messages. We may do these things whether we contact you or you contact us. If you ask us to discuss your Account with someone else, you must provide us with documents that we ask for and that are acceptable to us.

New:  You agree that we may communicate with you by mail, telephone, email, fax, prerecorded message, automated voice, text message or other means allowed by law regarding your Account.You agree that we may contact you at any telephone number (including a mobile telephone number that you provide us), and use an automated telephone dialing system or similar device to do so. You agree that we may monitor or record any conversation or other communication with you.

The company’s intrusive visiting rights caused a stir in February, when the Los Angeles Times published an article about them and other news outlets picked up the story. The credit card company responded that it would review the language.

In a brief reply to emailed questions last week, Capital One spokeswoman Pam Girardo provided a copy of the new language to appear in the “communications” section of its agreements for general-purpose cards. The new clause — at 76 words it is about one-third the size of the old one — cut out the right to visit at home or at work. It also deleted language saying the company could contact you “with any frequency” and “at any time, including weekends and holidays.”

Another deletion involved a sentence giving the company the right to “modify or suppress” caller ID and “identify ourselves on these services in any manner we choose.” Instead, the new terms say the company may contact you by text message or mobile phone, if you provide your cell number.

The company has said it visits cardholders only in limited cases to repossess sport vehicles such as jet skis or snowmobiles. Capital One administers merchant cards for companies including Kawasaki, Yamaha and Polaris.

Knock, knock. Who’s there?
Some merchants seemed as surprised to learn about the visiting rights as cardholders.

“I don’t know why we’d even do that,” Costco spokesman Jeff Elliot said. Almost all holders of the chain’s Capital One store cards have transitioned to a newer, American Express-backed card that has a rewards feature, he said. Elliot wouldn’t discuss the number of Costco cards in use.

Jeffrey Sacia, director of credit card operations at Menards, the Wisconsin-based home improvement chain, said “there’s a regulatory reason” for the language in the Menards store-card agreements. He referred further questions to Capital One as the administrator of the card.

A text search of about 1,700 card agreements on file with the U.S. Consumer Financial Protection Bureau turns up none with language that specifically allows visits to the home or workplace.

Repossession rights, however, are common. They’re present in some cards issued by Wells Fargo, GE Capital and Comenity Bank, which backs store cards from Pottery Barn, Abercrombie and other niche retailers. Creditors also generally need a local court’s permission to repossess merchandise if it is stored on your property.

Why would Capital One assert rights to visit cardholders if they are used so infrequently? The company did not grant requests for interviews, but consumer lawyers noted that the rights transfer to other companies that buy debts on the debt market. The broad powers granted under the agreement could help sell delinquent accounts to debt buyers, consumer advocates said.

The partner agreements may also simply require more review, since the retailers will have to be involved as well, said Robert Hobbs, deputy director of the National Consumer Law Center.

“It’s hard to think that some of the more reputable retailers would want these provisions in their contracts,” Hobbs said.

Terms giving creditors the right to call you on a mobile phone have a wrinkle that consumers should be aware of, Hobbs added. Courts have said this permission is temporary, so it may be revoked if your financial circumstances change.

“I think it’s important that consumers under current law are protected from phone calls that may cost them money and interfere with their efforts to get back on their feet,” he said. “When an account’s current is a whole different thing than when you’re laid off or ill.”

See related:Know your rights under the Fair Debt Collection Practices Act

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