By: Matthew Hector
According to a story published by ProPublica and The Daily Beast, Capital One filed the most credit card collection lawsuits in the nation for the period of 2010 to 2014. Although the number of suits it has filed has dropped off since 2011, it remains the largest filer by far. Research also demonstrated that many Capital One cardholders carry a balance from month-to-month. Given that many subprime borrowers already live on razor-thin budgets, a significant period of unemployment or underemployment can send many into default.
To make matters worse, since Capital One is an original creditor, it is not subject to the provisions of the FDCPA. This means that many borrowers who may have had a counterclaim for unlawful collection practices do not have that important piece of leverage when dealing with Capital One and its aggressive collection tactics. Also problematic is the fact that most collection lawsuits filed by credit card issuers are very difficult to defend in court. The lender has its own, original records and can easily prove its case. The same is not often true for debt buyers, who purchase charged-off debts from issuers like Capital One. Given that Capital One pursues so many of its defaulted accounts on its own, defendants hoping to set a case for trial and see the case dismissed by the plaintiff will generally be sorely disappointed.
In most situations where Capital One seeks to collect a defaulted debt, consumers are left with two options: settle the case or file bankruptcy. Ironically enough, shortly after receiving a discharge, the most common lender to offer a new credit card will be Capital One.