Capital One Bank (USA) N.A., Bankruptcy Fraud, Washington 2024

Capital One Bank (USA) N.A. to Refund Over $2 Million in Monies Improperly Collected From Consumers in Bankruptcy

In a shocking reveal, Capital One Bank (USA) N.A. has agreed to refund approximately $2.35 million to consumers in bankruptcy, after it was found to have improperly collected monies from debtors. The U.S. Trustee Program (USTP) made the announcement, stating that the bank had filed erroneous claims in bankruptcy cases, resulting in the collection of $2.35 million to which it was not entitled.

The USTP entered a settlement agreement with Capital One in October 2008, after allegations that the bank had attempted to collect on debts that had previously been discharged in bankruptcy. At the time, the USTP alleged that Capital One had filed approximately 5,600 erroneous claims in bankruptcy cases, and the bank acknowledged that it had received approximately $340,000 to which it was not entitled.

As part of the settlement, Capital One agreed to an audit process overseen by an independent auditor chosen by the court to examine Capital One customer accounts and ensure that all monies improperly received by the bank were returned to consumers who had filed bankruptcy or to their bankruptcy estates. The auditor would also approve reimbursement to consumers and bankruptcy trustees for out-of-pocket costs and expenses, including attorneys’ fees, incurred to contest erroneous claims.

The auditor’s report found that Capital One erroneously filed approximately 15,500 claims totaling approximately $24.7 million on account of debts previously discharged in bankruptcy, and that the company received payment of approximately $2.35 million on approximately 5,100 of those erroneously filed claims. The refund to each affected consumer or bankruptcy estate will be based on the amount paid to Capital One as a result of the erroneous claim.

Consumers and bankruptcy trustees need not take any further action, as reimbursement of attorneys’ fees and costs will be based on the amount paid by consumers to their counsel or costs incurred by the bankruptcy trustee to object to Capital One’s erroneous claims. Affected consumers and bankruptcy trustees will receive further information from the auditor.

The USTP is the component of the Executive Office for U.S. Trustees that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws.

Those with questions or concerns can contact Jane Limprecht, Public Information Officer, at (202) 305-7411.

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