Class Says Capital One Imposes Sneaky Fees

HARTFORD (CN) - Capital One calls it "Payment Protection" to charge 89 cents a month for every $100 on its customers' credit card balance, and forces them to "opt out" of the deal they never asked for - even if customers are senior citizens who cannot receive benefits from it, a class action claims in Federal Court.

Lead plaintiff Lisa Sullivan says was enrolled in the Payment Protection program in 2007. But when she was laid off in July 2009 and tried to claim the program's benefits, Capital One rejected her, she says.

At the time she had a $547.96 balance on a card with a limit of $500. As a result, she says, Capital One charged her a $39 past due fee, $10 Capital Pay Transaction fee, $4.48 Payment Protection fee, and a $39 over the limit fee: $92.48 in fees for a $33.08 purchase.

Sullivan says Capital One failed to disclose that the Payment Protection program is a finance charge and that the minimum payment does not include all fees it imposes - including interest on the penalty fees.

The class is estimated as 50,000 Connecticut cardholders. Sullivan seeks punitive damages for unjust enrichments and violations of the Truth in Lending Act and the Connecticut Unfair Trade Practices Act.

She is represented by James Miller with Shepard, Finkelman, Miller and Shah of Chester, Conn.

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