Capital One’s recent credit card launch into Costco stores was really successful … maybe too successful actually!
Since day one they had an influx of new customers signing up for the Capital One Platinum Mastercard exclusively for Costco Members and it turns out that the volume was a little more than they were prepared to handle.
Shortly after the card was launched, we published a generally favourable review of the card’s features. Not long after, negative comments from disgruntled customers started pouring in quantities never before seen on HTSM.
That’s why when I was at the Canadian Personal Finance Bloggers Conference in October, I decided to approach Laurel Ostfield, the Director of Communications for Capital One Canada when I learned she happened to be attending the conference.
Laurel took the time to go through the reader comments with me one by one and informed me that they were already aware of many of the issues and had been working to resolve them as quickly as they could. She agreed to coordinate an interview for me with a representative of the Costco Mastercard within a few weeks of the conference.
She delivered on that promise and I recently spoke with both her and Simon Maycock (Vice President of Partnerships), who is responsible for the Costco credit card rollout.
I came prepared and went to bat for all the frustrated Costco customers who left those angry comments on the review. In response, Simon and Laurel were equally ready to demonstrate that they were not only taking each and every complaint seriously but they were taking real action to fix the problems.
What Was Everyone Complaining About Anyway?
I went through all the comments one by and sorted them into complaint buckets so I could see what the biggest pain points were. Then, I raised these issues with Simon and Laurel to see how they’d respond.
Here’s how that conversation went:
1) Frequent fraudulent charges and slow resolution.
Several people like Darren, Linda, and Fred complained that they had fraudulent charges on their card. This happens from time to time with all credit card companies, but the big problem seemed to be that they were having a hard time getting the charges reversed in a reasonable amount of time. One person even said they had been waiting 4 months without their complaint being fully resolved.
Simon openly admitted that when the card launched they went through a period of rightsizing their staff and departments. They had a much more positive response to the card from Costco members than they anticipated which caused a big influx of customers calls resulting in a strain on all departments.
Since then, through hiring and reallocation of people to the most needed areas, they have become much more responsive and now when customers call in they should both be getting served and having their fraud charges reversed in a much more timely manner.
2) Confusing statements.
Confusing paper statements is another common complaint that surfaced. People are having a hard time identifying exactly how much they owe and when. This causes them to either underpay, overpay, or miss payments altogether.
I requested a sample statement from Laurel so I could review it myself and post an image, but unfortunately she was unable to track one down for me.
The bad news is that you probably aren’t going to see a big improvement in your statements, at least for a little while. Simon and Laurel said that most customers have said they want a better online and mobile app experience so they have been applying most of their resources to improve those two things.
Both have undergone some major improvements and they are continuing to iterate on them as they receive feedback to give people the best possible experience. That said, they are aware of issues with the paper statements and eventually plan to take lessons they learn from online and mobile and apply them to the paper statements. Right now, there is no timeline as to when that might happen.
3) Slow payment processing resulting in interest charges.
Ryan, Srimanta, and Barry all complained that they were having problems with interest charges from not paying their bill on time, even though they did pay it on time. According to them, it sounds like Capital One was extra slow in processing their payments which resulted in them getting dinged with undeserved interest charges.
Simon was a bit surprised about this issue being a problem because he informed me that no matter how a person pays their bill, they always backdate the payment to the day when the payment was made, not when the payment finishes processing.
That should mean that as long as you pay your bill before the due date, then you shouldn’t get charged interest. I assume this means that if you post your bill in the mail, they will use the posting date as the payment date. However, if this is a big problem for you, I would recommend using a faster means of payment like online banking to make sure your payment gets there on time. You can also give automatic payments a try which is discussed next.
Please leave a comment below if you are still experiencing issues with this today along with the details of exactly how and how far in advance you are paying your bill.
4) No automatic monthly payments.
Many credit card users want to make sure they are never charged interest so they set up automatic payments from their bank account to their credit card. Most, but not all, card issuers offer this service.
Capital One unfortunately did not offer automatic payments when the card first launched, which seems like a rather large oversight.
I asked Simon why this service wasn’t available at launch. His response: they tailor each of their credit card products according to expected customer needs and this wasn’t identified as a priority for when the card first launched.
He admitted that after the card launched they did get a lot of requests from customers to add this feature in. They actually just launched the service in November so it is now available to all clients who wish to take advantage of it.
5) Low credit limits and denied credit limit increases.
Bobby, James, and some others have run into difficulty getting an appropriate credit limit to cover their regular monthly spending habits. In the comments, they describe themselves as creditworthy consumers that always pay their bills on time.
I asked if Simon could comment on their internal policy for giving credit limits and how that compared to their competitors. He wasn’t able to provide a lot of detail because they have a proprietary process for determining each person’s limit. He did say that they do make their best attempt to give everyone a limit that both works well for them while still staying in line with their own internal policies and risk profile.
Ultimately, I agree that it is hard to tell someone how they should lend their own money. Protecting your investment has to be of utmost importance whenever you invest so who can blame them for being prudent? Just the same, it seems like they could do a more thorough evaluation of their process and speak to customers to see how they feel about it.
I know that when I had the Capital One Aspire Travel World Mastercard a few years ago, I had the exactly the opposite problem. They afforded me a $20,000 limit right off the bat, which was much higher than anything I had before.
When I called to request they lower the limit, the CSR told me that they simply couldn’t lower it. The reason: this was a World product and required I have a high credit limit to qualify for the card. Both Simon and Laurel thought this was very strange indeed as neither of them were aware of that kind of restriction. I was relieved to hear that, because I have never encountered another bank that stopped me from lowering my credit limit.
6) Long hold times and unable to reach fraud department.
Long hold times throughout all their departments was a big problem when the card first launched. Complaints about poor customer service in the comments definitely reinforced that sentiment.
Higher than expected demand was again the culprit here. Even though they took action quickly, it takes time to staff up and meet the excess. Now, they have finished hiring and allocating the appropriate resources to handle ongoing customer contact.
Simon gets metrics about hold and response times sent to him on a weekly basis and he takes action on them as soon as any real problems are identified. If you try calling them again now, you should find their response and hold times are much more reasonable.
Plus a travel bonus worth another $150.
Quantities are limited.
Capital One Welcomes Feedback
At the end of the call Laurel wanted to stress that Capital One is very open to customer feedback and wants to listen to everything their customers have to say about their products.
So, if you have a Capital One card in your wallet, and you want your voice to be heard about your experience this is your opportunity!
Leave a comment below with your feedback and I will make sure that Laurel is made aware of all the comments.