Consumer complaint received 2022-06-13
Company: CAPITAL ONE FINANCIAL CORPORATION
State: GA
Product: Vehicle loan or lease
Sub-product: Loan
Issue: Managing the loan or lease
Sub-issue: Billing problem

Complaint:
Hello CFPB - I am having a problem with Capital One 's Auto Finance department. They are causing direct harm to me as a borrower, and despite multiple attempts to provide options for remediation, they are unwilling to do so. They have stated that they have the ability to assist me in the way in which I am requesting to be assisted, they simply refuse to do so. I will lay out the facts below and attempt to explain where customer harm is going to come in. 

On XX/XX/XXXX, I made a payment of {$12000.00} to Capital One. This payment was enough to pay roughly two full years of my obligation to Capital One ( monthly payment is {$610.00} ). Capital One took the {$12000.00} and applied it to three future due dates ( XXXX, XXXX, XXXX ). The remaining funds ( roughly {$10000.00} ) were applied as a principal reduction payment that did not move my due dates forward. 

I noticed that my due dates were not pushed forward by roughly two years as expected, so I called Capital One to request that they reapply my payments towards due dates. Capital One associates erroneously explained to me that by paying as I did, and not paying again for two years would cause me to pay more in interest than if I made monthly payments of the exact correct amount. This is verifiably untrue, as this is a basic simple interest loan. Lowering principal earlier in the loan will greatly reduce the interest over the life of the loan. The associates then asked why I made a lump sum payment, stating that depending upon my reason for making a lump sum payment, they would be able to apply the payment to the due dates as I requested ( demonstrating that they have the ability to do what I was asking ). Their request of why I am making a lump sum payment is unreasonable. They do not need to know why I chose to pay in the way that I do- they should only be concerned with the fact they received funds from me that should satisfy almost two years of obligation.

My calls were ultimately escalated to their " Office of the President '' group. The entire escalation occurred during XXXX and XXXX, where Capital One followed a lot of the same talking points provided previously- the way I'm paying will cause more interest ( again - wrong ), that they can apply the payments if I have a valid reason ( what makes a reason valid? ), and that they will not apply my payments out to future due dates past three months. 

I laid out at each call the customer harm and Capital One benefit that is gained by adhering to this policy. Each associate said that they understood the case I was making. Their associate 's understanding leads me to believe that Capital One is aware their policy causes customer harm and only benefits Capital One. They choose to not change it to protect the consumer. Here are the points I made, based on paying Capital One enough money to satisfy just under two full years of payments : XXXX If I pay how they suggest, I will have a negative impact to the total interest that I pay to them over the life of the loan. 
XXXX They will charge me late fees for a due date four months out, despite having funds that satisfy two years of due dates. 
XXXX They will report me negatively to the credit agencies, leading up to charge off status in less than a year, despite having funds that satisfy two years of due dates. 
XXXX They will repossess my vehicle, despite having funds that satisfy two years of due dates. 

Each of these points were " understood '' by Capital One employees, but no action was taken to alleviate potential customer harm. 

I called Capital One on XX/XX/10 to discuss with them again the possibility of reapplying my payments out for three months - now that there are a future three months to apply the payments to. They declined the reapplication of payments stating that they will only pay forward three months from the initial payment. 

Capital One did offer to " refund '' three months worth of payments for me so that I could turn around and pay them again. This was unacceptable because - Capital One has held these funds interest free for a period of three months and refused to pay me the market rate for interest in which they've had my money and two - because by refunding my money and having me repay them, I would have to pay interest on the principal that they have refunded - in this case, doubling the consumer harm by holding funds from me interest free, and then not waiving interest on the reapplication of my payment. 

I should not have to make additional payments to Capital One while they are holding two years worth of future paid payments. Their policy is harmful to the customer on multiple levels ( Additional interest paid, Late Fees, Negative Credit Bureau Reporting, Charge Off, Repossession ). Capital One is aware of this harm. Capital One will do nothing to address their harmful policies to alleviate this harm. I exhausted all avenues attempting to resolve the issue with Capital One directly. I believe the CFPB is my last opportunity to seek help in helping Capital One update their policies to one that helps, not harms, their customers. 

XXXX XXXX

Company response to consumer: Closed with explanation