Consumer complaint received 08/31/2017 about Credit card or prepaid card (General-purpose credit card or charge card) with CAPITAL ONE FINANCIAL CORPORATION (CA).
Issue: Fees or interest
Sub-issue: Problem with fees

Complaint: I have a Capital One credit card. 

A number of years ago, I lost my job, went through financial straits, and fell badly behind on my payments, about 90 days if I recall. As a result, my credit card account with Capital One was restricted, meaning I could no longer use the card to make purchases. 

When I found work again, I immediately caught up on my card payments, bringing the account current. Nevertheless, the account remained restricted, and although I have not missed a payment for about three years now, I am still unable to use the card to make purchases, and I receive no account benefits whatsoever. On several occasions, I have asked that my card be unrestricted, allowing me to use it once again, but Capital One has repeatedly refused this request. In effect, this means that I do n't have a credit card with Capital One, and I have n't had one with them in over 3 years. Instead, I just have an account with a small balance and horrible interest rate. 

My complaint is not that Capital One will not reactivate my account. That is their decision and I have enough other revolving accounts that it does n't effect me one way or the other. What does bother me, however, and the source of my complaint here, is what I consider to be an unfair and unethical business practice. Namely, the fact that Capital One has unilaterally terminated the services it was providing me, prohibiting my use of the account and terminating my account benefits, but they nevertheless charge me an annual " membership fee '' of {$60.00}. 

Paying an annual fee for a card that you can actually use and receive some benefit from is one thing, but what on earth am I paying a membership fee for when the service provider refuses to provide its services? Imagine any other entity engaging in such a practice. It would be totally unacceptable. For example, imagine you purchased an annual gym membership, and a few months in you missed some payments. The gym refuses you access until you catch up on payments - which you do. But then, once you 've caught up, the gym STILL refuses to allow you to use their facilities, but continues charging you each month. It would be entirely unacceptable, of course, because if you are paying for services, you expect to actually receive such services. 

The same is true of my Capital One credit card. I have been paying an annual membership fee for their services for three years, and yet, they refuse to actually administer the services they agreed to provide. They are quite literally charging me for nothing. 

I have sought to have these charges ceased, to no avail, and have sought to at least reactivate my card, also to no avail. The reason for these charges, according to various representatives at the company, seems to be either that they are allowed under the contract and that 's that, or that the membership fee is required because it is expensive to administer even an inactive credit card account. While the first of these assertions is obviously true, it is essentially meaningless in its failure to address the fact that it remains unethical, while the second of these assertions is laughable in its failure to account for the fact that usurious interest rates on my account provide more than enough income to cover any account administration tasks. 

The bottom line is that credit card companies should not be permitted to both unilaterally terminate providing services to its customers, even after the customer has corrected any defaults, and also continue charging customers fees for the services it refuses to provide. Instead, credit card companies should be mandated to provide the contracted services after an account has brought current, or else cease charging annual account fees on accounts they refuse to reopen and refuse to provide services and benefits for. At minimum, the permissible fees that can be charged for a restricted account should be limited to the same amount as the company 's most inexpensive no frills and no benefits cards, which, incidentally, is often zero.

Company response to consumer: Closed with explanation