Capital One (COF) Gets Victory in Lawsuit Filed by Cardholders
The lawsuit filed against Capital One Financial Corporation COF, claiming that the company overcharged its credit and debit card customers on foreign currency related transactions, has been dismissed. The news was reported by Reuters.
The plaintiffs had claimed that Capital One tried to maximize profits by charging “fictional” rates while converting foreign currency transactions into dollars.
They said that COF ignored the rules that were set by Visa and Mastercard for the use of wholesale market rates or government-mandated rates.
Per the accusers, this increased the profit on transactions, in which cardholders pay a percentage of the transaction as a fee.
However, U.S. District Judge Patricia Tolliver Giles has dismissed the above-mentioned claims, saying that the cardholders in the proposed class action did not identify language in their card agreements that was “clear and unambiguous” regarding the rates and fees that COF would impose.
According to the judge, the plaintiffs were not able to show that their card agreements incorporated the processors’ rules or created an “objectively justified expectation” that their exchange rates would resemble those incurred by Capital One or the processors.
Giles stated, “Plaintiffs have failed to plausibly allege facts sufficient to state that defendants breached a contractual duty owed to plaintiffs through defendants’ own conduct or the processors’ conduct.”
Over the past six months, shares of COF have gained 34% compared with the industry’s 27.1% growth.
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Currently, COF carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lawsuits Faced by Other Finance Firms
Last month, a class-action lawsuit was filed by five customers against JPMorgan JPM, claiming that the bank charged unconscionable fees for unintentionally depositing checks that bounced.
Per the suit filed in the White Plains, New York federal court, JPM charged customers up to $30 for a “deposited item return fee” after checks they tried to deposit bounced for no fault of theirs.
JPM’s customers called the bank’s “junk fees” for returned checks “predatory.” The customers cited an October 2022 U.S. Consumer Financial Protection Bureau bulletin that said that indiscriminately charging such fees was likely illegal.
HSBC Holdings plc HSBC was fined £57.4 million by the Bank of England (“BoE”) for “serious failings” over its measures to protect customer deposits between 2015 and 2022. The fine is the second-biggest fine ever imposed by the regulator, which reflects the seriousness of the failings.
BoE’s Prudential Regulation Authority said that HSBC failed to accurately identify deposits eligible for Britain’s Financial Services Compensation Scheme, which protects up to £85,000 in customer bank accounts.
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