No lender sues more of its customers than Capital One, according to ProPublica’s review of state court data. The debt collection lawsuits target workers who earn below $40,000 a year. Unfortunately, state laws offer little protection- even workers near the minimum wage could have a quarter of their take-home pay taken or their bank accounts completely cleaned out.
ProPublica obtained and analyzed court data from 11 states, including Florida. Capital One stood out in every state for having the most number of lawsuits against its customers. For example, in Indiana counties for which court data is available — home to about two-thirds of the state’s population — the bank filed about 3,360 suits in 2014. That’s about a quarter of the suits Capital One filed in 2010, but still more suits than all other national banks combined in 2014. In Clark County, Nevada, which includes Las Vegas, Capital One’s suits comprised about 40 percent of all suits by major banks. In Miami-Dade County, Florida, the total was about the same.
The lawsuits were often over debts as small as $1,000, which reveals a hidden side of Capital One’s business. The bank has only the fourth-largest credit card portfolio, but such a large portion of its cards are held by those with poor credit that it is the country’s largest subprime lender. With those loans comes a high risk of default, and the company is particularly aggressive at recouping its losses.
Experts agree, the “disturbing” volume of lawsuits filed by Capital One should prompt regulators to investigate whether the perils of subprime credit cards outweigh the benefits. The federal Consumer Financial Protection Bureau is in the process of writing new rules for debt collection that are expected to cover a wide range of activities, including the filing of lawsuits.
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