There is no way a taxi from the Miami airport to a Hallandale Beach hotel should cost $777.44, but that’s the charge a Texas couple found on their Capital One credit card after a cab ride last September. Their combined round-trip airfare to the city was half what they paid for the 45-minute jaunt. And whether fraud or error, after the Miami Herald published a story about the apparent taxi scam, pretty much everyone agreed that the tourists should not be stuck with the bill.
Everyone, that is, except for Capital One’s fraud protection department.
Initially, the company said the couple was on the hook for the bill, claiming the charge was valid, and closed the case on Nov. 13, 2017. But Capital One took another look after the Barringtons sent the Miami Herald article directly to Richard Fairbank, president and CEO of the company. Late last Friday afternoon, a representative from Capital One called Eugene and Carol Barrington and told them for the second time that the company’s research revealed no wrongdoing by the taxi driver, despite the driver’s own admission that the overcharge was a mistake.
At that point, Capital One offered the couple a “goodwill credit” of $350, half of the amount in dispute.
“That’s about when I blew up,” said Carol Barrington, who has held the line of credit since 2013 and said she always pays the bill on time. “They should have said yes, yes, that was fraud. Here is your 700 dollars. I don’t need their goodwill.”
By Monday, however, Capital One had changed its tune again. The change of heart came after a reporter contacted the National Consumer Law Center, a consumer protection advocacy group. The representative who answered just happened to be on a Capital One advisory panel. She then reached out to the company.
Voila! The next day, the company credited the remaining balance to the Barringtons’ account and then some — a $792.78 credit in total. Still, there was no acknowledgment of fraud or error.
“We don’t understand why Capital One is still terming this repayment a “goodwill” credit instead of a fraud reimbursement,” said Carol Barrington in response. “But we will take it.”
The Barringtons arrived at Miami International Airport on Sept. 13, 2017, in the late afternoon, took a yellow taxi to their hotel, and swiped their Capital One card for what they believed was a $70 charge, as noted on the meter. But the driver charged them through an app on her cellphone, rather than the machine on the back of the seat. Eugene Barrington couldn’t see the numbers on the tiny screen, nor would the driver provide a receipt when he asked. The charge ended up being 10 times what Barrington thought he signed for.
Capital One provided the following statement on Monday: “Because the customer authorized the charge by signing the receipt [actually, the cellphone screen], the transaction was upheld per Visa/MasterCard guidelines. That said, being a valued and long-term customer, we gave Mr. Barrington a goodwill credit and fully refunded the charge.”
Capital One told the Herald that customers should take some responsibility by getting receipts and paying attention to what they are signing. The company recommends signing up for real-time text alerts. Capital One did not respond to the Herald’s questions about how real-time alerts would have affected the Barringtons’ dispute process.
Beyond the company’s policy, however, the Barringtons had rights under U.S. law in this case, according to the expert with the National Consumer Law Center, who asked not to be named. “Just because they came up with a signature doesn’t prove that they approved the transaction or that it was valid.”
The Fair Credit Billing Act, a 1974 amendment to the Truth in Lending Act, protects credit card holders from being on the hook for erroneous charges, overcharges, or charges where goods or services were not delivered as agreed — in other words fraudulent charges — and places the fraud detection burden on the bank.
“The act was really passed as credit cards were new, to help people to be comfortable with them and to create a system where people weren’t going to be defrauded by electronic payments,” the consumer law center expert said. She said the laws generally work, and they effectively protect consumers by putting responsibility on companies rather than consumers.
“They have more powerful systems to detect and prevent fraud,” she said. “And they can certainly swallow a $700 bill easier than an elderly couple can.”
Capital One has at times faced more than its share of billing complaints. According to a 2014 report based on two years of consumer complaint data released by the Consumer Financial Protection Bureau, Capital One drew the most complaints for a credit card issuer, accounting for one in five total complaints. Yet, other than taking a company to small claims court, credit card holders have very little recourse in cases where credit card companies don’t abide by the law, the expert with the National Consumer Law Center said.
Conversely, a 2015 analysis by the personal finance website ValuePenguin found that Capital One was second most likely to issue a refund.
Despite the reimbursement, which the Barringtons learned about from the Herald, the couple feels the months-long dispute, during which the company tried to close the case twice, amounted to consumer abuse.
“Would we ever use them again? Never,” said Carol Barrington. “I’d carry a bucket of cash around before I’d use them again.”