always the last to know

I have a feeling everyone else already knows about CapitalOne. No one else would have been stupid enough to sign up for a credit card with them in the first place. But no, that's paranoid, CapitalOne couldn't possibly survive on the ignorance of a single consumer, there must be other people who, for one reason or another, blunder into the tar pit.

Several years ago I had a credit card account with CapitalOne. I didn't use it much, but at some point I put a lot of things in storage in London; Big Yellow did not have a facility for payment by direct debit, so the only means of payment it would accept was a standing order on a credit card, and I misguidedly gave them the CapitalOne card.

Big Yellow rented out its unit in four-week increments, which meant that it charged the credit card every four weeks rather than at a fixed time every month. It was not straightforward to remember when they would be making a charge on the card. The way I generally found out was that a statement would arrive from CapitalOne listing the charge and giving the date for a minimum payment - a date which had already passed. On the next statement CapitalOne would levy a late fee of £20 for the late payment. I then came up with a cunning plan for outwitting CapitalOne: I would simply make a payment, out of the blue, without waiting for a statement! I would then be SURE to be in time for the minimum payment date, because I would have sent out the payment before CapitalOne even sent out the statement. Ha ha! Ha ha! Little did I know.

Sadly, these payments - even when covering the full outstanding charge from my storage facility - did not count as early payment toward the next statement. So a new statement would be issued; in the meantime the storage facility would have charged the card again; and CapitalOne, despite a recent payment of £80 or so, would once again levy a late payment fee next time round.

This was all pretty exhausting, and Big Yellow had a complicated procedure for changing card authorisations, so it dragged on, but I did finally switch the authorisation to Egg (who have, by the way, always been a pleasure to deal with). I was now living in Germany; it was inconceivable that CapitalOne would ever send me a bill in time for it to be paid on time, which meant that any time I used the card I might as well add an automatic £20 late fee, which meant, naturally, that this was a card I would never use again. So I did what any rational person would do: I terminated the other standing payment on the card, paid off the balance in full on May 9 2007 and terminated the account. (When I say 'paid off in full' what I mean is that, to the best of my recollection, I made a payment £20 over what I knew I owed them, to be sure of covering any fees that CapitalOne might have thrown in under its arcane accounting system.)

I then didn't hear from CapitalOne for over a year.

A few months ago I got a statement from CapitalOne. They had apparently made a payment of £12.83 or so to some entity or other under the account which had been closed the previous year; they wanted to be paid. Another statement came demanding payment and levying the familiar CapitalOne late fee. Letters came from Valerie Lipton, Director of Collections, threatening legal action. I wrote pointing out that I did not have an account with CapitalOne and had not had one for a very long time. A letter came from Sven Lagerberg, Customer Relations Manager, saying how sorry he was that I was closing my account, but pointing out that I could not close the account without paying the balance in full. Also further letters threatening legal action from Valerie Lipton, Director of Collections, and Michael Woodburn, Vice President of Collections. Today brings yet another letter from Valerie Lipton, Director of Collections, and a letter from Greg Mrkusic, Director, Debitas Legal Services, stating:

Capital One Bank - Account Number: 5460965760131389

Outstanding Balance: £77.43

We have been instructed to collect the outstanding balance you owe on the above Capital One credit card account.

Clearly, having an outstanding debt and a Default recorded on your credit file is upsetting. We understand that for many people the stress of having bad debt is a heavy burden and the stress this causes can be difficult to deal with.

Our aim is to help make sure that this situation does not get any worse. We want to work with you to resolve this situation as quickly as possible. From now on, we will be managing your account.

&c &c &c

The letter (dated 3/12/2008) goes on to say:

You must take one of the steps listed above within the next three days.

Ah, CapitalOne, CapitalOne, feels just like old times.

Anyway, I have already pointed out to Ms Lipton, Mr Woodburn and Mr Lagerberg that the account has been closed for over a year and there have, naturally, been no new transactions; if they have made a payment to some entity on an account which their former customer has not used for over a year it is, necessarily, unauthorised. What will they say if this goes to court? "We never received the notice of termination; the fact that we stopped sending statements for a year is just a coincidence." "The transaction for which we are billing the customer, one year after the alleged closure of the account, is NOT unauthorised. We don't have any independent proof that it was authorised, but LOOK, you can SEE it was authorised, it says so right here on our bill!!!!!"

And they want to run up legal costs chasing this?

Now, one of the threats brandished by CapitalOne is that they will destroy my credit rating. They will send details of this "unpaid" bill to Experian and all the other credit agencies, and if I ever need approval for a mortgage or some such thing I will look like a bad risk because, um, I didn't pay CapitalOne £77.43 when their computer made a mistake. I don't think this is an empty threat; on the contrary, I think it's the easiest thing in the world for CapitalOne to pass this garbage on to the credit rating agencies, and a really messy, long-drawn-out business to get something off your credit rating once it's on the record. But I don't take kindly to extortion. Not only do I not take kindly to extortion, I also don't hand over £77.43.

Anyway, as things stand CapitalOne has nothing to lose by firing off threats of legal action. I can't MAKE them look through their records for proof that the recent charge was authorised; I can't MAKE them spot the absence of authorisation and retract their bill. All I can do is watch them escalate their threats of legal action, until, presumably, we all go to court. Which is pretty tiring.

Mr Mrkusic does not mention the stress of being dunned by a credit card company to whom you don't actually owe any money. If I owed them money it would not actually be stressful, because I could just, you know, pay the bill. Hey ho hey ho hey ho.