Capital One Credit Discrimination by Zip Code
April 17, 2009 by David
Filed under Money Matters
There have been ongoing rumors since credit became tough to get that some creditors (American Express in particular) have been rejecting new applications or reducing existing customer credit limits based on where the borrower lives. It was said American Express was doing so on the grounds that home prices and foreclosures were worse depending on your zip code. That’s a reason there are new AmericanExpressSucks and other protest websites appeaing on the internet.
Now we have first-hand evidence that credit discrimination based on where you live is in fact hapenning.
Here is a letter from CaptalOne (the big credit card firm) I now have in my hand dated April 5 2009 which say’s “Thanks for your recent request for auto financing. After reviewing your application we cannot grant your request for credit because of worsening economic conditions in your area, in addition to the year of your mortgage.”
So basically it means because the applicants geographic area has lots of foreclosures and his/her home may possibly have upside down home equity thay are not able to buy a new car!
It’s interesting to note the Capital One credit turn-down letter does not mention the normal credit rejection reasons such as past due accounts and negative credit issues. I think that’s a real shame and huge consumer letdown issue which can only make the economy worse (not better) due to reduced credit availability, combined with less retail sales as a direct result.
If this discriminatory credit “redlining” was done by home lenders or Realtors® involving real estate sales it’s believed doing so would be illegal and subject to presecution and fines so why is it legal to discriminate by credit card firms and auto lenders?
That kind of blatant credit discrimination and redlining needs to be complained about to the Federal Trade Commission in our opinion. You may file a consumer complaint at this FTC web site http://www.ftccomplaintassistant.gov
My wife just got one of those redlining rejection letters from Capital One. Interestingly, it also stated that they didn’t even bother to run a credit inquiry. We live in the Atlantic City, NJ area. However, I just read that Barney Frank applied some pressure to Capital One and successfully persuaded them to stop doing this redlining. Maybe now my wife can be rejected on her own merit and have that rejection reflected on her credit report. Okay, that last line was a joke, but this is a serious matter and I’m glad it is being corrected.
The latest example of over-charging credit card consumers is something called a 60-Day Late Charge which AmericanExpress has implemented.
We have seen an actual American Express billing statement dated May 2009 which shows a very high $295 fee which AMEX calls a 60 day late charge. In the past we believe credit card firm late charges (regardless of how many days late) were always a flat fee or fixed charge, i.e. $30 or $35 thus making the new late penalty extremely abusive in our opinion.
Anyone else seen this done, or other credit card company abuse and excess?
hi; you haven’t scrached the surface. we couldn’t get catalogs and info for tools and equipment. when we called e-mailed we gave our correct address (ie n-east indiana) BUT when we used the zip for monument circle Indy!!! It was amazing. the post office corrects our error and gets it to us!!!however when we have requested “home retention program” on a dozen times in a year plus we have recieved nothing NADA ?? no returned calls no letter no post card. and when we call we have to start all over…………a letter the says were scum and we must cut up our library card would be a step up?
Our car-home-rv insurance went up?? didn’t get our “no claim” rebait?? went to the web site and applied for correction and an address change. and some how got a $105.90 check at the bottom of a form with the zip code corrected.
i was told to think of how many things you put that number on….mike