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Thread: Capital One show up at cardholders' homes, workplaces

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    Default Capital One show up at cardholders' homes, workplaces

    http://www.latimes.com/business/la-f...#axzz2tgoZwSeA

    "Credit card issuer Capital One isn't shy about getting into customers' faces. The company recently sent a contract update to cardholders that makes clear it can drop by any time it pleases.
    The update specifies that "we may contact you in any manner we choose" and that such contacts can include calls, emails, texts, faxes or a "personal visit."
    Incredibly, Cap One's aggressiveness doesn't stop with personal visits. The company's contract update also includes this little road apple: "We may modify or suppress caller ID and similar services and identify ourselves on these services in any manner we choose."

    "Subprime" credit cards are becoming more aggressive in their attempts to collect before they send the debt to the collection agencies.
    No one plans on letting a credit card become over due. It happens when life throws a curve ball. It is important to review the terms and conditions of any credit card you have, just in case any of these scenarios happen to you. It is easier to find a card with reasonable terms when you shop for a card then it is dealing with horrible terms after.



    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Banned Melonie's Avatar
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    Default Re: Capital One show up at cardholders' homes, workplaces

    "Subprime" credit cards are becoming more aggressive in their attempts to collect before they send the debt to the collection agencies.
    No one plans on letting a credit card become over due. It happens when life throws a curve ball. It is important to review the terms and conditions of any credit card you have, just in case any of these scenarios happen to you. It is easier to find a card with reasonable terms when you shop for a card then it is dealing with horrible terms after.
    Unfortunately, and arguably due to new financial regulations making it more difficult for lenders to 'recover' losses via fees, penalty interest rates, etc., 'subprime' lenders have little choice but to resort to 'aggressive' collection methods to cut the actual losses in the first place. If a 'subprime' borrower is behind on several debts, human nature leads to a conclusion that the lender who makes the biggest 'ass pain' of themselves will get paid before another lender who takes a lower profile approach.

    The same new financial regulations are also arguably leading to a 'two tier' financial system ... one for 'prime' customers, and a far different one for 'subprime' customers. While Cap One is 'taking the point' in regard to setting far different terms and conditions for 'subprime' borrowers, undoubtedly other 'subprime' lenders will quickly follow. They have little choice unless they want to experience greater losses as the result of 'subprime' customers paying off Cap One before paying them !!!

    From one particular point of view, this is actually a 'positive' development. New financial regulations recently limited the ability of lenders to recover unpaid money from 'delinquent' borrowers by limiting late fees, penalty interest rates, etc. The result of this was to force non-delinquent 'subprime' and 'prime' borrowers to effectively subsidize 'delinquent' subprime borrowers by being forced to pay higher than necessary interest rates themselves. Aggressive collection measures may restore some amount of lenders ability to actually recover unpaid money from 'delinquent' subprime borrowers, thus theoretically reducing the need to 'overcharge' other borrowers to ( partially ) make up for lender losses caused by delinquent subprime borrowers.
    Last edited by Melonie; 02-18-2014 at 04:34 PM.

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    Default Re: Capital One show up at cardholders' homes, workplaces

    Pretty sure that is illegal, and pretty sure its impossible with those who live in controlled access apts/houses.

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    Default Re: Capital One show up at cardholders' homes, workplaces

    ^^^ reading the complete LA Times article, it's illegal for a law enforcement agency to do this, but not illegal for a 'private party' to do it under a legally binding contract ( the credit card service agreement ) with the person being 'visited' .

    Agreed that certain 'gated communities' and apartment complexes can and do restrict physical access by non-law enforcement related private parties. But very few 'subprime' borrowers are likely to live in 'high rent district' places that offer such a high level of security / access control. And even if 'protected' at their residence, Cap One would still be free to enter the delinquent 'subprime' borrower's workplace, local 'hangouts', etc.

    Arguably, 'over the top' actions by Cap One could potentially lead to harassment or stalking accusations ... something which Cap One has already 'factored in' ... and something which local police and DA's offices would have to 'buy into' for the delinquent 'subprime' borrower to actually get any relief. Obviously, Cap One is in a position to spend millions of dollars on legal appeals ( which will also force local gov'ts to spend similar amounts unless they decide to drop any such harassment or stalking charges )

    Nope, this is 'for real' ... see comments by Cap One's spokesperson at the LA Times story link. Keep in mind that while only 1.5% or so of ALL credit cards are delinquent, delinquencies among 'prime' credit card holders are near zero while delinquencies among 'subprime' credit card holders are much higher. And the average amount of delinquent credit card debt is over $5000. If Cap One 'sells' a bad 'subprime' credit card account to a collection agency, they might net, what, $1000 ... meaning that Cap One can afford to spend $1000-$2000 per 'delinquent' subprime account holder to finance 'aggressive' collection measures in hopes of recovering the full $5,000, and still come out way ahead versus simply 'dumping' the delinquent account to a collection agency for pennies on the dollar !!! Also, if other 'subprime' lenders also adopt 'aggressive' collection efforts, it will send a clear message to 'subprime' card holders that is very likely to reduce future delinquencies and losses for Cap One and the other 'subprime' lenders - with NO additional costs involved. Admittedly, landlords, utility companies, auto loan lenders etc. might actually bear the brunt of these 'aggressive' collection efforts by Cap One, but that's of no concern to Cap One or it's stockholders.

    Thus in 'real world' terms, the only real relief available for delinquent 'subprime' borrowers subjected to such 'aggressive' collection measures could be to A. prioritize repayment of the delinquent debt ( at the expense of other, less 'agressive' creditors ), or B. a bankruptcy filing. In the absence of prioritized full repayment by the delinquent 'subprime' card holder, this may be the other intent of Cap One, because a bankruptcy filing by the delinquent 'subprime' borrower will allow Cap One to recover 'something' at comparatively little legal cost to Cap One.

    From a cynical 'real world' viewpoint, Cap One is simply facing the arguable fact that many Americans now have too little ( after-tax ) net income remaining to service all of their existing debts plus cover their ( rising ) basic costs of living. With that in mind, Cap One's 'aggressive' collection efforts are intended to position themselves as the creditor who will be repaid first ... even if other creditors can never be repaid as a result. Undoubtedly certain pundits would point out that such a move by Cap One constitutes an 'End Game' ... something I won't pursue further in this forum.
    Last edited by Melonie; 02-18-2014 at 08:04 PM.

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    Default Re: Capital One show up at cardholders' homes, workplaces

    are there any subprime cards that have limits high enough to do this? I thought subprime cards were $500 or less-why bother spending money to collect such a tiny debt? what if you move? every apartment I've lived in has gotten tons of mail for past residents, most of which look like bills etc, and I'd be pissed if people started knocking on my door asking for someone else.

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    Default Re: Capital One show up at cardholders' homes, workplaces

    Keep in mind, a subprime credit card is designed for those with little credit history or bad credit. These types of bad-credit credit cards typically carry higher fees and interest rates to offset the increased risk involved with subprime lending. The credit limits are determined by the lender. Not all subprime cards are secured.

    What is often the case, you start with a prime rate and you have good credit. When your credit score drops or you have a late payment; credit cards have default rates and terms. So your prime rate card with a $5k limit has suddenly defaulted into a subprime rate credit card.

    Smaller financial institutions like regional banks or credit union credit cards tend to have better terms, even if they default. They also have smaller collections departments. Which means they dont have the resources to track you all over the place to harass you.

    I plan for the worse and hope for the best. I have never defaulted on a credit card. But Ill be damned if I sign up for one that has these kinds of terms.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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