Capital One Uses ‘Dark Patterns’ to Lure Consumers into Applying for Credit Cards, Class Action Alleges

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A proposed class action alleges Capital One has engaged in a “bait-and-switch scheme” involving a deceptive pre-approval application and misleading advertisements to lure unsuspecting consumers into applying for its credit card.

According to the 20-page suit, consumers who view Capital One’s online promotions, which state “Pre-Approve Before You Apply,” “See if You’re Preapproved,” and “Find Out if You’re Eligible With No Risk to Your Credit Score,” reasonably assume that they are applying to get pre-approved for the Capital One Walmart Rewards Card, and that Capital One will perform only a soft inquiry on their credit report.

However, Capital One does not in fact process a pre-approval application, and instead processes a credit card application and conducts a hard credit pull that can lower a consumer’s credit score, the filing alleges.

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Further, the case says that during the application process, consumers are guided through several web pages that do not inform them that they are not actually applying for pre-approval. Customers are eventually prompted to enter their personal information, including name, birth date, Social Security number, citizenship status, telephone number, email address, employer information and annual income, the suit alleges.

“Even if customers realize by now that they are applying for [an] actual credit card, they’ve already committed to the credit card application as a result of Defendant’s bait-and-switch maneuver,” the filing says. “By pressing the ‘Continue’ button, customers will have actually applied for a credit card, and had their credit hard pulled to their detriment.”

The suit alleges Capital One has induced proposed class members into applying for its credit cards through deceptive design practices known as “dark patterns” that effectively trick or manipulate consumers “into unwittingly making unwanted and unplanned purchases.” According to the complaint, dark patterns, including bait-and-switch tactics, are “highly effective at influencing consumer behavior” given that they take advantage of cognitive biases that “steer their conduct or delay access to information” necessary to make fully informed decisions.

The plaintiff, a New Jersey consumer, claims that he completed Capital One’s application process in March of this year after coming across its Capital One Walmart Card pre-approval advertisement. The case relays that soon after the plaintiff submitted what he assumed was a pre-approval application, he received a notification that Capital One had processed a credit card application and conducted a hard and soft run of his credit report.

“As a result of Defendant’s bait and switch scheme, Plaintiff’s credit score reduced by approximately 7-10 points,” the complaint says.

As the case tells it, Capital One has violated the New Jersey Fair Credit Reporting Act by obtaining consumer reports under false pretenses, without a permissible purpose and without authorization from affected individuals.

The lawsuit looks to represent anyone in the United States who applied for pre-approval for Capital One’s Walmart Rewards Card and had their credit hard pulled as a result.

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