Capital One has agreed to pay $16 million to settle claims that it improperly added extra charges to customers' accounts.
Current customers will receive their share of the settlement directly into their bank accounts.
$16 Million Settlement for Capital One
Capital One has settled a class action lawsuit by agreeing to pay $16 million over claims of illegal fees. The U.S. Sun revealed that the lawsuit alleged that the bank charged unlawful fees for returned checks or ACH debit transactions.
Both current and former account holders of Capital One could benefit from this settlement. These fees were inappropriately charged between September 1, 2015, and January 12, 2022.
Specifically, the fees in question were categorized as either an "un-refunded non-sufficient funds fee" or an "overdraft fee" associated with a represented check or ACH debit transaction.
According to Tech.Co, To be eligible for a share of this settlement, individuals must have held a Capital One account between September 1, 2015, and January 12, 2022, and been charged representment fees during this period.
Many eligible participants have likely received an email or postcard notice indicating their potential entitlement.
Typically, claiming a share in such settlements requires filling out a form to express interest. However, eligible individuals need not take action to claim their share for this particular settlement with Capital One. Those who do not opt-out will automatically receive their payout if they qualify.
Those wishing to exclude themselves from the settlement or file an objection must do so through the official settlement website by June 17, 2024.
Also Read: Bank of America and Wells Fargo Among 79 Banks Closing Branches as Customers Shift to Online Banking
Each participant's payout is determined pro rata, which depends on the number of eligible claimants. It is important to note that the total fund of $16 million will be reduced to $10,308,909.16 after legal costs and other fees are deducted.
The final approval hearing is set for July 15, 2024, with payments expected within 60 days of approval. However, any objections raised could delay the payment timeline.
Capital One Faces Another Large Settlement
Capital One has again agreed to a substantial settlement following a class action lawsuit. In 2023, the bank resolved a $190 million lawsuit related to a data breach that compromised the personal information of over 100 million customers.
This cyber attack occurred in 2019, targeting the data of Capital One credit card holders in the United States and Canada.
Some individuals shared on Reddit that they received payouts of up to $707.31. However, the opportunity to claim any compensation ended in November 2023.
Following the recent settlement issues, Capital One has experienced another significant change in its operations. Last month, Walmart announced that it would no longer use Capital One as its rewards program's exclusive credit card issuer, as The Gazette reported.
Since 2019, the card offered a 2% return on in-store purchases and a 5% return on delivery and pick-up orders, all without an annual fee. Despite this change, Capital One will continue to provide credit card services.
This decision followed a ruling by U.S. District Judge Katherine Polk Failla of Manhattan in a lawsuit Walmart had filed against Capital One. Walmart accused Capital One of being slow to post transactions and replace lost or stolen cards.
Judge Failla sided with Walmart, citing "repeated customer service failures" as grounds to terminate the contract early.
Based in McLean, Virginia, Capital One remains a major player in the banking industry as the ninth-largest U.S. bank by assets reported last month to exceed $468 billion.
Related Article: Capital One Users Struggle with Login Failures; Online Banking Access Disrupted
