Capital One Canada Upcoming change in General Terms and Agreement - Highly Suspect Scarborough Ontario
A few weeks ago I received a change in terms notice by Capital One Canada. Verbatim it said:
Interest calculation change
"As of your May statement, we're changing the way we calculate your interest if you don't pay your balance in full by the due date. Here are the answers to some questions you may have about this change:If you don't pay off the balance from your previous statement the way we calculate your interest will not change for Account Access Cheques, new and undated charges What's new is that we'll begin charging you interest on all unpaid charges from your previous statement from the date the transaction occured.
We'll ensure your statement will display the proper rate to calculate the finance charges if you don't pay off you balance during the grace period. When rates change over statements, we'll use a weighted average calculation to determine the effective interest rate."
I read this over and over and thought what does this mean? Well it turns out after contacting the company and asking very pointed questions, Capital One Canada is taking out the grace period from the credit card. Not just mine by the way but all customers across Canada. I thought is this even legal and why are they doing this? The response I got from Capital One was - it's the economy. Now I know that Capital One is based in the US and doing something like that there wouldn't be surprising but here in Canada when the economic climate here isn't as severe? Capital One Canada considers itself independent of Capital One in the US so something didn't add up. Well I did some digging and contacted the Federal Government agency that oversees financial institutions and they said that Capital One at present is the only company in Canada that is doing this and it is possible that they are basing their decision on what happened in the US which isn't right. The Agency said I need to write to the company Ombudsman and if nothing happens to contact the Ombudsman of the government agency overseeing the banks and financial institutions. I again contacted Capital One to find out more information and was passed on to a supervisor who tried to convince me that this decision would benefit customers when in fact it wouldn't. I told her I would be contacting the ombudsman and because I've been with the card company for three years and never received any incentives I assured her that I would no longer use Capital One and as soon as I paid off what was owed I would close the account. (I've since cut the credit card thank God)
This notice is to anyone else who may be using Capital One's credit card services in Canada. Buyer beware. Get out as fast as you can because this move will only indebt customers further and pad the pockets of Capital One. If I find out anything more I will keep you posted. for Capital One customers check your statement and see if it says the same convoluted, message as the one I received stated above. If you have it, contact Capital One's****.>
Dee in toronto
Scarborough, Ontario
Canada
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3 Updates & Rebuttals
Dee in toronto
Scarborough,Ontario,
Canada
The Government of Canada intervened!!!
#4Author of original report
Thu, May 21, 2009
Although they didn't address the issue of the ridiculously high interest rates many credit card companies have charged their customers, the Canadian government must have received quite a few complaint similar to mine from other disgruntled Capital One customers. Why? Because this initial complaint filed was in regards to Capital One making a decision to remove the grace period from their credit card, which when you really think about it defeats the actual purpose of a credit card. The government agreed and decided effective immediately that all Credit card companies, financial institutions etc. must provide a 21 day grace period on their credit cards! They must also make the interest rates they charge clear and understandable to customers and must make sure that they indicate on statements how long it would actually take to pay off the credit card if the consumer only paid the minimum monthly payment. It isn't a magnificent success but in light of my original complaint it is and I will take it! Thanks Rip off report for providing a forum such as this to make sure organizations can be held accountable and consumers can be protected.
Now if only the ridiculously high interest rates of the credit cards could be lowered somehow...
Dee in toronto
Scarborough,Ontario,
Canada
In response to the employee who kindly responded
#4Author of original report
Sat, May 09, 2009
Hello...
I have received news that the Minister of Finance is actually continuing the government's investigation into the Credit card industry. Apparently Jim Flaherty began an investigation back in March of this year to address the fees credit card companies were charging merchants and consumers.
As of this time, he has decided to expand that investigation to examine the actual practices of credit card companies because he says that there is little if any regulations on that industry in Canada. I haven't even sent my letter yet and it is very clear to me that Capital one's general terms and agreement conditions continue to scream "SUSPECT!!!"
Now in response to the rebuttal...
in actual fact what is being contested and it probably will be proven is not the fact that capital one decided to pull the grace period from its credit card.
What is being raised is the reason behind that decision.
The reason that the company has decided to do this, appears to be based on the status of Capital One in the US. This is where the legality issue is raised. According to reports from one of the Business network channels, it appears that the US- Capital One along with a host of other financial institutions in the states made a similar decision because of the country's economic climate as well as tumbling profits and skyrocketing losses. However, what needs to be noted here is that, this is happening in the US --- NOT CANADA.
From what I understand, Capital One in Canada is doing quite well fiscally.
Therefore, to make a decision to remove the grace period and make the claim that it is based on the "economy" for starters and even worse that Capital One is the only financial institution to do this indicates that they've made the decision based on their US counterpart. That is where the question of legality is raised.
The other issue regarding legality is the fact that Capital One made an internal decision about this, which means that they probably didn't address this with the governing body that oversees banking and financial services. Also if it was just a run of the mill change then why the convoluted message that is so confusing, you have to speak to 3 different people to find out the truth...It makes you say hmmmmmm....
So with that, I will send in my letter to the Ombudsman of Capital One and along with that because I believe I will get the run around, I will send it to the government agencies as well as the minister who probably would want to know this is going on.
So to the employee who sent the rebuttal...I am not out to get you or even to stick it to Capital One...I am simply a consumer who is tired of big business thinking that it is okay to in essence plunder the pockets of people in order to pad their own. I just want business to actually have a conscience and for its employees to know the truth. If my little note can contribute to even a drop of that happening then ---FANTABULOUS!!!
And as they would say in your neck of the woods...
THANK YOU AND HAVE A NICE DAY!
Bubbles
Riverview,New Brunswick,
Canada
Its Illegal to Not have a Grace Period?
#4UPDATE Employee
Sat, May 09, 2009
So, i work for Capital One in Canada. We have gotten more than enough calls about these change in terms. Basically, if you pay your balance off every month you will not be charged interest. So lets say right now you have a balance owing and you buy a new TV. Whats going to happen is your going to be charged interest right away, which makes sense in my books. Your using money thats not yours to buy something thats going to be yours. As for illegal? Not at all. Interest is added right away on cash advances as well as any checks you do, this just makes it all the same even if its a purchase. The grace period was a perk, nothing more. Best thing to do is suck it up, your looking at paying five extra bucks for that TV. Best of luck with whatever you investigate though, I just work there and am trying to make it clearer.