The Checkout

Frequent Flier Mile Hassles

Within the past week I've received three complaints about Capital One's new rewards policy for its cardholders. Two of my colleagues and a reader say the company has significantly cut their mileage benefits; the reader said his values were cut in half.

Here's his complaint: "I have accumulated 180,000 points, which under my agreement was worth 2 round-trip tickets to Australia valued at 85,000 each up to a max of $1,700 each." Now, he says, "the new, improved plan" will require 340,000 points for the same tickets, or double the points he previously needed.

Here's another complaint from my colleague Leslie Walker who writes the .com column:

"Am I the only Capital One credit card customer who gets irked every time I see those 'What's in your wallet' commercials on TV touting its 'no hassle miles' reward plan? As I see it, Capital One's new frequent-flier miles are a total hassle. I've been steaming ever since Capital One sent me a notice last year saying it was changing the formula for redeeming those 'no hassle' miles for airline tickets. The net effect was a big devaluation of my miles. By my calculation, they are now worth half what they were, at least to the places I want to go."

Walker continued in an e-mail: "The devaluation was applied retroactively, so customers like me who had amassed a lot of points really got the shaft. I had more than 100,000 miles, with plans to use them to fly to Europe this summer. But my miles are no longer worth enough to get the two tickets to Rome I was eligible for just a few months ago. Now I don't even have enough miles for a single ticket to Italy!"

Walker noted that Capital One tried to mollify customers by crediting accounts with extra miles during the transition. "And to be fair, the company also boosted the number of miles we now earn, from 1 mile per dollar spent to 1.25 miles. ... That's helpful going forward, but of no use for existing balances," she said.

"The company sent me a confusing letter last September that didn't make clear how much devaluation was occurring. It did offer a brief window--a few weeks--during which I could have booked travel using the old miles formula. But I wasn't ready to book and had no clue how much devaluation was occurring until I went to start redeeming miles last week."

Capital One's oldest redemption plans were tied to travel distance; some plans required 35,000 miles, for example, to fly to Florida. Some of its more recent plans used a formula that multiplied the ticket price times 90 so a $100 ticket would cost 9,000 miles.

Under the latest "No Hassle" plan, cardholders need 15,000 miles for tickets priced up to $150; 35,000 miles for tickets priced between $150 and $350 and 60,000 miles for tickets between $350 and $600. Any flight over $600 requires miles equal to 100 times the ticket price so an $800 ticket would take 80,000 miles.

Walker calculated what the changes meant to her: "Capital One's old formula gave you a ticket to anywhere in Europe worth up to $1,000 for only 50,000 miles. Today, a $1,000 ticket to anywhere costs 100,000 miles--twice as many. And making it worse, air travel to Europe is more costly than a year or two ago. So a ticket to Rome today likely would cost at least 150,000 Capital One miles--roughly three times what it took last year."

Walker added: "I know travel costs are escalating, so Capital One--and for that matter all the airlines--are going to have to do something to hold down costs in their frequent-flier programs. But I sure wish Capital One had not applied the changes retroactively, or at least had given customers clear notice--and more time than a few weeks--to use the old miles before devaluing them so abruptly."

Capital One spokeswoman Pam Girardo said the company did give advance notice--two months. She added that the new formula offers some of the lowest redemption thresholds in the market. She did acknowledge that some flights could require more miles than before, but that's why the company gave out bonus miles and bumped up the rate at which consumers can earn their miles. Some cardholders are earning 1.25 miles for every $1 spent, up from 1 mile for every dollar; some are earning as many as 2 miles for every $1). Girardo also said Capital One has eliminated many of the previous restrictions, including the requirement that the passenger stay over on Saturday night. And consumers have more airline choices, she said.

Walker wonders if Capitol One's changes are "a taste of what's to come in the many frequent flier programs that are over-extended and facing rapidly escalating reward costs."

Any thoughts?

Meanwhile, here's my advice, for what it's worth. If you feel particularly aggrieved about your miles, it wouldn't hurt to call Capital One and discuss your concerns with a customer-service representative. Maybe the representative will give you some hassles, but maybe, just maybe, you'll get some extra miles instead.

By  |  January 26, 2006; 10:40 AM ET Consumer News
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Not at all surprising, given the horrible devaluation process in the entire airline industry. Airlines no longer serve meals on lengthy flights, are cutting back on drinks service, are removing blankets and pillows from planes, are considering making customers pay to check baggage, etc. The attack on frequent flier miles is most stunning because it hits at your best customers, and highest margin business customers. Between changing the restrictions on preferred status levels and FF mile usage, the airlines are making it much tougher to build and maintain a loyal identity to one airline (which ultimately benefits that airline tremendously). It's a fascinating process, driven by the culture created by Southwest, which, for all of the criticisms, delivers a product that is of almost equal quality to legacy airlines for what is in some cases a much lower cost (provided you are willing to go without seat assignments).

Posted by: Mike | January 26, 2006 11:33 AM

I don't currently have a credit card that gives miles for purchases, but every story I hear from friends that do is a horror story. It's as if they want to make it hard so that people are less likely to cash in their miles.

So far the only hassle free program I ever used was Southwest Airlines frequent flyer program. For each round-trip ticket I purchased I earned 2 points (4 if I booked on line). When I reached 16 points I got a free round-trip to anywhere in the US. And I was able to book my free ticket anytime (no blackouts). And they considered it to be one of their fully-refundable tickets, so when I decided to extend my vacation and extra 2 days, they just put my on the same flight 2 days later at no charge.

I love them.

Posted by: Marlene | January 26, 2006 12:44 PM

I have over 300,000 United miles but they are worthless as there are never any reward seats available. I started last may trying to book anytime within a 2 week period for a flight in December. By mid-November still no availability. These "rewards" are worthless.

Posted by: ticked flyer | January 26, 2006 12:55 PM

I hope this isn't a growing trend. I have been very pleased with my Navy Federal Travel Visa. I've gotten two free trips to Europe, each costing 40,000 miles.

Travel rewards credit cards still seem to be the most appealing rewards credit cards.

Posted by: Winnie | January 26, 2006 12:56 PM

I think this might be part of a trend. I noticed recently that the number of points to redeem almost any type of air reward increased under my MBNA Worldpoints card. And when I tried to redeem points, I read the fine print: in most cases, you can only use your points if your flight includes a Saturday night stay somewhere. Not nearly as flexible as they made it sound when I signed up.

Posted by: Charles | January 26, 2006 1:07 PM

all miles have been devalued. I have Delta Amex and they are generous about how many miles they give you, but instead what we were used to 50,000 miles to europe there are two grades 50,000 for sky saver and 100,000 for sky choice. For some reason, you can never find a sky saver trip so basically all my miles have been devalued. Its really annoying.

Posted by: jc | January 26, 2006 1:12 PM

Join an airline frequent flier program, and commit to one airline alliance for flying, rather than a bank rewards system. This works best if you live near a hub of one airline, but usually there are one or two airlines that dominate metropolitan markets, and price differences between airlines rarely differ more than $40 on major routes. Over the next few years, most airlines will move to price based redemption, rather than distance, so start planning those big trips now! Also, anyone paying $1500 to fly to Rome from the US is crazy! (The price of a ticket that would require 150,000 miles from Capital One)

Posted by: Matt | January 26, 2006 4:24 PM

I tried booking a trip from Dallas to one of those "exciting destinations" that American Airlines talks about in its AAdvantage program. I was going to Albany, N.Y. In winter. No surprise, there were no seats for the following week using a regular award. However, for just double the miles, I could use an AAnytime AAward" to get to AAlbany. I asked what the soonest date was that I could use the cheapest award and the reservationist was unable to find a seat anytime at all. And I had her check day after day for months. Here's an example of an airline not just limiting the seats, but not offering seats. There are NONE available, unless, of course, you're willing to buy into their scam and burn off double the miles.

Posted by: David | January 26, 2006 6:37 PM

The Chase Travel Rewards programs was combined with the Capital One program last year. Like CO customers, after a paltry 8 weeks notice, we found our points devalued 30%. A RT ticket to Hawaii, for instance, skyrocketed from 25,000 to 35,000 points. Bottom line is that when they say you "earn" points, keep in mind those points are convertible to so many matchsticks at any moment.

Posted by: tdh | January 26, 2006 8:10 PM

Bait & switch. Suck them in-then change the game. Deja vu. Welcome to America. Frequent flyer biz is a bad a deal for all sides. I can't believe the overhead to run these programs is worth it to airlines, especially when most of us fly on price and almost all airlines are losing money to start with. The marketing types love to reel people in on that aroma of a free lunch. Seems we are suckers for anything we're told is free. If we think someone else is paying we quiver with glee. I hate what a proud industry has become since deregulation. Curse you Jimmy Carter.

Posted by: Mike | January 26, 2006 8:30 PM

I think that many commentors are correct to expect more devaluation of reward miles--whether from bank or from airline programs (though the banks have far less incentive to hold back).

The airlines face massive backlogs of unused miles -- probably many of them in small accounts. To remove what looks like an accounting debit, the easiest thing is to de facto devalue the miles. This can be done by raising reward thresholds, and the important clients -- business travellers who accumulate and use their miles regularly -- can be rewarded by raising their earnings rate. Thus, for example. the airline I fly with now credits double miles (but NOT double credit towards "regular flier status"!) to people already at the second level of their awards program.

They've kept the incentive value for really frequent flyers, while reducing the actuarial value of all those overhang miles, many of which will never be used.

Expect more of this, I would guess...

Posted by: PQuincy | January 30, 2006 11:45 AM

I had a 1% cash back card. They simply switched it to a "Points" card. They would not say why and would not change it. I would have to open an entirely new card account and lose the credit history with this one.

The new card cashback program? 1/2%.

We are reaping the benefits of Bush in office. Namely, screw the consumer. Look at today's profits for Exxon. They've never been higher. This is the same thing.

Posted by: MBNA Reward Scams | January 30, 2006 1:06 PM

I disagree with the above poster. Getting into debt just to earn miles is ridiculous. Our generation spends more than it earns. Try leaving the credit cards at home. Give yourself a weekly allowance. The credit cards are the boss. They can only control you if you let them. Many debit cards also give you points for usage. The good thing is, the money comes right out of your account. When you get your expense check, it goes right back. No more counting on expense checks as income to cover living expenses!

Posted by: buffy316 | February 1, 2006 9:51 AM

I have ~150 000 miles each with Delta and US Air and can not use them on a reward ticket since no seats are available to fly to Europe during the summer. That already happened last year. I found out that Delta accepts the booking of a reward ticket 11 month in advance. Unfortunately I can not plan that far ahead. I feel cheated.

Posted by: very angry | February 2, 2006 10:09 PM

I thought I was the only one who was so steamed at Capital One - I was never offered more points or 1.25 going forward, so maybe that offer was only on certain cards. The miles they took away represent $ which I would have used for anything had I know what they were up to - vs. giving the rewards back to Capital One. I sent a complaint by e-mail and they sent a reply indicating they couldn't address complaints by e-mail. I then sent a letter and they replied indicating they couldn't respond to written correspondence. Customer Service like that is hard to pass up, but I'm using my remaining miles and I'm out of there. I'm sure there will be a lot of complaints from customers who haven't yet realized what Capital One has done. I wouldn't know yet except I went to some of the milage after building it up for a very long time and discovered the significant reduction was made just two weeks prior!

Posted by: Doris | February 4, 2006 10:18 AM

Capital One's "No Hassle" is a real misnomer. What they did raising the mileage levels was bad, what they did with the cash reward part of the program was downright unethical. Previous to 11/01/2005 you could redeem each mile or point earned for one cent. They retroactively changed that to one half cent for each mile earned. I had 102,000 points that were worth $1,020, they are now worth $510.
Their response when you can get someone to talk to is "you were notified in September of the change which we have the right to do at any time". Great way to do business not that I will with them any more.

Posted by: Ron | February 7, 2006 8:48 PM

I have been accumulating miles in the DELTA, AIR FRANCE and NWA Worldperck programs.
I have more than 600 000 miles in all.
The problem is that there is never any seat available to go to Europe from any major city. I live in NY and have offered to leave from Boston , Philadelphia and Houston but never any luck , except may be in january. Airlines should be required to be more upfront about how many award seats they allow . I am starting to feel that this is all a hoax and there is actually no free tickets at all available. My last try was Feb 20th and I gave each of the 3 airlines a wide window for travel from June 1st to Sept 15 to find one seat from any of the 4 cities to Paris. I did not get anywhere except a ridiculous routing thru Cincinnati for a 18hrs trip for a trip which normally takes 7 hrs.

Posted by: Beatrice | February 19, 2006 3:55 PM

I have a question regarding the Caroline Mayer comment from 01/26 article above

"Meanwhile, here's my advice, for what it's worth. If you feel particularly aggrieved about your miles, it wouldn't hurt to call Capital One and discuss your concerns with a customer-service representative. Maybe the representative will give you some hassles, but maybe, just maybe, you'll get some extra miles instead."

Did anyone ever get extra miles to offset the losses from the Capital One reward changes? If so tell us what to do?

Posted by: Fred | February 23, 2006 5:40 PM

It took my husband and I four hours to book 2 seats on a flight to London and returning from Stockholm, so that we could enjoy our June 8th cruise. Time was spent mostly with Capital One.

We booked his ticket on US Airways. We were told the Business class seats were $4560. His seat was booked for 80,000 frequent flyer miles. No problem......

I called Capital One and was told my Business class ticket would take 456,000 NO HASSLE MILES (yeah, right) I had 163,000. I was shocked! I talked to and explained my plight and no help from the 5 people although I was told I was one of the first card holders. Whoopee........

I am closing my Capital One account and signing up with US Air. I ended up buying just a regular ticket from US AIR for ...$900! My husband and I will share his business class ticket..........

Posted by: Gator | March 6, 2006 3:17 PM

I was one of the Capital One customers who found out the hard way that they had reduced their rewards (especially the cash rewards which I prefer) by half. I used to be able to turn in 20000 miles for $200.00 cash. Now it is 20000 miles for $100.00 cash. I also tried to e-mail the company and they replied that I needed to call a customer service respresentative. When I did she said a letter was sent out in November explaining the changes in the rewards. I then asked to talk to a manager and when she transferred me I was cutoff. I decided at that point to just quit using Capital One and have applied online for the Citi Dividend Plantinum Select Card which gives you 5% cash back on purchases at supermakets, drugstores, and cash stations plus 1% on all other purchases (no annual fee). I spend a lot of money on gas as I commute, plus we all spend money at supermarkets and drugstores almost everyday. Probably a better value all around. Capital One used to be a good deal. I don't think it is anymore.

Posted by: Sue | March 6, 2006 3:34 PM

I just went through the same thing all the others have experienced . I talked to a custmer service rep and got nowhere. I am using my miles to purchase merchandise, and then cutting up my Capital One Card.
Capital One is ripping off their card holdersIf everyone will do as I am doing, perhaps Capital One would wake up!!

Posted by: Ken | March 16, 2006 5:10 PM

I have read all the comments on this page and I aggree with all of them, but, you have to consider one thing: you are already getting something for FREE. Yes it may have gone down some but as I see it, getting something for free is great. I redeem my rewards for merchandise.
I recently got a beautiful picture clock for my husband. It cost alot to redeem the points for it considering it only cost $55 but at the end, the clock did not cost ANYTHING out of my pocket. I earned the points from regular expenses I would have had to pay anyways. Yes, capital One did wrong by not informing the card holder properly or failing to provide a better turnover period, but people.... you are getting things for free!!!! Some of our Americans cannot afford the luxuries others hold for granted. I AM one to complain all the time but when I see people close to me struggling without getting anything for free, makes me change my views. If you don't like the rewards, then get out of it! Change companies or go without it ending up paying for those freebies that are complained about.
The gas company execs get rich off of us and it's called greed but then again we do the same. What ever happened to being thankful for the things we receive????? (Specially when they are free)

Posted by: ANGEL | April 7, 2006 3:52 PM

When I first started with the Capital One Card, I was told that I would receive a free ticket to the Caribbean at a value of up to $720 for 40,000 points. If the ticket was more than $720, I could simply pay the difference. Shortly before booking a flight, several years ago, I received a notice that the card was being changed over to a GO MILES card and that I would be charged one mile for every dollar value of the ticket. As the cost of the ticket was $802, I would now need double the miles to purchase this ticket. I called a consumer hotline where a person gave me the name of the bank (I believe in S. Carolina that oversees the actions of Capital One and how they do business). I then called Capital One and after numerous phone conversations, they agreed to give me $700 toward the price of the ticket. What bothered me most was that my husband, who had just recently signed up with Capital One, had not received the same notice regarding the GO MILES. Is it possible that Capital One was changing the program only for the cardholders who were accumulating too many miles? I have not received a notice that my miles were once again being cut in half (as some of the responders here have mentioned). Perhaps there should be an investigation of the practices at Capital One. Smells fishy to me. Definately bait and switch...and quite possibly illegal.

Posted by: Marian | April 11, 2006 12:00 AM

I have one of those cards. When Capital One made the switch in Nov 2005 they did modify the terms of their "Miles One" program. Since I always cashed my "miles" in rather than used them for travel, I elected to move to the "No Hassels Cash" program. I still get my penny per dollar (1%) back, just like under the old program. You didn't have to read the fine print to figure that out either. There about as good or bad as any other credit card company. I know, I have cards from just about all of them over the years.

Posted by: stuart | April 12, 2006 4:24 PM

TOTAL BULL #@^%!!!!!!
Cant use them, devaluated and now my account is closed because of a "lack of acctivity!!! THIEVES!

Posted by: Rick | April 18, 2006 2:26 PM

Has anyone had success complaining to the Federal Reserve Bank System regarding the reward devaluations.

I understand Capital One has the right to change its terms but does that include the right to use deceptive mailings that tell customers that they are getting more when they are really losing rewards?

Posted by: Fred | April 22, 2006 10:17 PM

CapOne are now 'expiring' miles too...

Time to say good bye to this unethical company.

Posted by: Martin | April 26, 2006 10:13 PM

"Capital One reserves the right to alter, change or terminate the program at any time without notice."

Yes, Capital One is flexible, yes your points will not expire, but here's the hitch.

After being a Capital One customer for several years, my wife and I had accrued a fairly significant sum of "Rewards" points. Under the former program, one point equals 1 cent (1%). However, Capital One's new "Ultra" program, in our case, affective 5/15/06 has halved the redemption value of a point to .5%! So after being a faithful Capital One customer for a number of years, they will "Reward" you by stealing half the value of your accrued points.

"Capital One customers reserve the right to terminate use of their Capital One cards at any time without notice"

So what do you do? Here's what we're doing. Immediately exercise one of the redemption options available under the existing plan. Capital One's "cash back" option allows you to redeem cash in increments of 10, 15, 20, 25, 30K points at the current 1% return (example 10,000 points = $100). Another option would be to request a gift certificate at one of their listed businesses. Select a merchant or merchants that you anticipate doing business with in the future. This will get the money out of Capital One's greedy hands and into yours'. Second, research a new credit card option and discontinue use of Capital One. Third, express your dissatisfaction with Capital One on forums such as this. Finally, notify your State Attorney General of this breach of good faith. Capital One is already under investigation in the state of Minnesota for "bait and switch" practices relating to their APR.

Posted by: Br | April 27, 2006 1:41 PM

You may also write to:

Board of Governors of the Federal Reserve System
Division of Consumer and Community Affairs
20th and C Streets, NW, Stop 801
Washington, DC 20551

Posted by: Fred | May 1, 2006 2:54 PM

Very dismayed reading all these posts. I have 250,000 with UAL and was planning to use them to go to Europe this summer. Guess that's not going to happen.

I have a Capitol One Card, but I never was in it for the Miles. I like the cash. I guess I haev the right one, I was worried they halved the $$$. I just checked and I get $100 for 10,000 points.

I also have the CitiBank cash back with the 5% on gas, groceries and pharmacy. But READ THE FINE PRINT. $300 CASH BACK/YR MAX. If you charge everything, thats' not enough! Points also expires at the end of the year, but they allow payouts of any increment so get whatever you have coming in Dec, they won't roll over.

CapitalOne points don't expire, but payouts don't start till 10,000 points and then 5000 increments. You can get gift cards as low as 2000 points.

Bottom line, you may need more than one card to max out the cashback! And with all the cheap airlines these days and the hassle of using miles isn't cash better?

Posted by: Bob | May 3, 2006 10:45 AM

i love capitol one. because there nice on the phone. and have great tv adds.

Posted by: dennis | May 6, 2006 3:50 PM

I too have had very recent experience with this new Capital One Rewards program. Like everyone else I had been saving up my miles to do something useful with them. This winter I had received in the mail a printed rewards redemption catalog with the date of such a early winter 2005. In this printed advertisement that was mailed top me, it reflected what appears to be the old redemtion value. When I called the company and spoke to 3 different represensatives, I was basically told the same exact story. The policy had changed in November of 2005, and even though I had a catalog showing a value for early winter of 2005 (one assumes this to be in effect for Decemember 2005 as that is the first day of winter, and they refused to redeem my miles at the printed rate in their own advertisement they asent me.
Needless to say I am very very agitated, upset and annoyed that a company can blatantly lie to its customers and mislead them in such a disrespectful and shameless manner.

Posted by: Kenny | June 17, 2006 4:08 PM

Capital One - The Hassle Card
I just called Capital One Customer Service yesterday about their miles redemption program and received NO satisfaction from 3 reps. Here's my story.
1) My husband and I each have our own separate Capital One Accounts.
2) I have accumulated over 100K points. So has my husband.
3) I have redeemed my miles twice for airfare. My husband has not.
4) I have received two notices over the past 18 months, each changing my reward schedule in Capital One's favor. My husband received none.
5) My husband recently stopping charging with Capital One and switched to a new company. Last week he gets a notice changing his reward schedule to a better deal for him.
6) I asked to be changed to the same schedule. Capital One said they made a 'BUSINESS DECISION' to change his plan but could not change mine to match his.

Hmmm. What if we all stopped using our Captial One cards? Would our mileage redemption plans improve?

Posted by: Ronnie Taylor | June 19, 2006 12:55 PM

I did the smart thing. When I got the Capital One notice last November, I cashed in all my miles and got $500 for the 50,000 miles. Anyone who read the notice and had any common sense would have done the same thing. That way your miles weren't devaluated.
I still kept my card and now have another 56,000 miles I'll keep for airtravel. I can never get a seat with my American or United miles, at least this way, I'm getting something for free.

Posted by: Sherry | June 19, 2006 8:07 PM

I just received an invitation to join Cap One No Hassle Miles VISA Platinum card, with 2.9% APR on balances transferred now then in 12 months it will go to 1.99% fixed APR for the life of the balance...I am not interested in purchasing anything with this card or using the miles for rewards.
With approved credit I could transferred up to $30,000 to this low APR...
If I don't have to purchase anything ever and I pay my bill on time...I may join.
Any thoughts?

Posted by: Yvonne | July 2, 2006 6:09 PM

Capital One is the biggest hassle of all, in that they lead you to believe it will be smooth sailing- at least with the airlines you knew you were going to get the shaft - and don't even bother trying to call "Customer service" - they are all outsourced to India & you can't understand their English, & all they do is repeat, I cannot help you with that. Do you have any other questions? Nooo!! answer the FIRST question - No I ca;nt do that..and on & on...also, the phone recording says you have 180 days to redeem a previously purchased ticket, but the customer service in India tells you - oh no, that is just general information - you only have 60 days now....WHY!! I can't answer that - do you have any other questions?? crimeny! I HATE Capital One & will just go to Discover & get cash back; I know times are tough, but to retroactively change the game - that is just wrong. And they were on to such a great idea...too bad they ruined it.

Posted by: Laura | July 21, 2006 1:08 PM

I have had the same experience with KLM/Northwest Airlines. I have spent 12 hours over the past week trying to locate an available PerkSaver ticket. I have communicated with several NWA Customer Service personnel without satisfactory results. They keep repeating the same line, " Sorry sir, award seating is limited." I guess! It turns out there is not a single Business Class seat available to Bangkok through the next 352 days! I think NWA has no intention of honoring its commitment to WorldPerks members by allocating sufficient seats to fulfill this obligation. If tickets under this program exist beyond the realm of theory, you can't prove it by me!

Posted by: Steven Mairs | July 21, 2006 11:55 PM

The reason I'm reading this blog and comments is because of my newfound inability to book any awards tickets on for Northwest. I have been a USBank NWA Miles Card customer for 10 years and, in the past, often flew nice trips on the miles. Now, I can't seem to book a thing, so I googled the "no hassle miles" program to se if it matches the commercials. Sounds like "no", but still sounds reasonable to me (1.25 miles per dollar and no restrictions on the seats you can use miles for is enough for me.)

Posted by: Scott | August 5, 2006 10:52 PM

I used Capital One's "travel center" to book a flight to Turkey in April, 2006. We had accumulated 60,000 points. They took the points from our Rewards account and charged our card for the ticket. I ws told I would be reimbursed. Four months later I have not received repayment. I have phoned 3 times and have been given the following excuses: (1) It will take 2 billing cycles before you receive a credit; (2) Sorry, we are having problems...I'm sure it will be straightened out soon; (3) I will forward this to one of our problem solvers. Think I will just cancel the card and file a complaint with every regulatory board I can think of!

Posted by: Mary Donahue | August 8, 2006 4:33 PM

We would like to add our complaint to the many others who have commented regarding their unethical treatment by Capital One. My wife and I were Capital One credit cardholders for about five years and paid our balances in full each month. (We also paid an annual fee.) We had accumulated 125,000 miles, which we wanted to redeem for two tickets to Europe. When we called on November 1, 2005 to redeem the miles we were informed that Capital One would not redeem the miles for the tickets because of a change in terms.

While we had several complaints against Capital One, our major complaint is that Capital One changed their terms for redeeming mileage for airline tickets and cash without prior notification. Until we contacted the Better Business Bureau and the Board of Governors of the Federal Reserve, Capital One did not respond to our correspondence (several letters) and refused to send us a copy of the notification they claim they sent us. In fact, we never received a copy of the notification even after several requests.

Under the Freedom of Information Act (FOIA) we requested and received (from the Federal Reserve) documentation of complaints against Capital One that are similar to ours. One of the complainants speculated that he was singled out because he avoided finance charges by paying off his monthly balances in full, thereby making him an unprofitable customer. This is the same suspicion we expressed in one of our letters to the Federal Reserve. While there were only five complaints received from the Federal Reserve we also know four other cardholders who likewise did not receive prior notification by Capital One of the change in terms. It is likely that many cardholders did not take the time or make the effort to file a complaint with the Federal Reserve and that the five complaints received represent only a small percentage of those cardholders affected. However, we believe that the complaints that were received reflect a pattern of violations by Capital One.

In response to Fred's question (posted on 4/22/06), yes, we did have some success with the Federal Reserve in that they provided us with information under the Freedom of Information Act.

We are looking into the possibility of having a class action suit filed against Capital One and have consulted an attorney regarding the matter. However, the five complaints received by the Federal Reserve may not be sufficient evidence. Consequently, we strongly encourage those with similar complaints against Capital One to send a letter to the Board of Governors of the Federal Reserve (the Federal agency overseeing the credit card industry). Their address is:

Ms. Jennifer Johnson
Secretary of the Board
Board of Governors of the Federal Reserve System
20th & Constitution Ave., NW
Washington, DC 20551

We believe customers need to send a strong message to Capital One and other unethical credit card companies whose poor business practices are not acceptable. Make your voice heard.

George & Joyce

Posted by: George & Joyce | September 7, 2006 5:20 PM

Ditto what George and Joyce said in their September 7 posting!!! Not only did the very same thing happen to us, but also to several of our relatives and friends.

Capital One needs to be held accountable for this sham.

Posted by: Nancy and Alan | September 9, 2006 10:09 AM

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