Capital One Class Action: Are Venmo Payments Treated as Cash Advances?

A class action lawsuit accuses Capital One of unfairly charging cash advance fees on Venmo payments, a practice the plaintiff claims violates the cardholder agreement and misleads consumers.

Consumers Affected: Capital One credit card holders who were charged cash advance fees for Venmo payments or other non-cash transactions.

Reason for Lawsuit: Allegations that Capital One unfairly applies cash advance fees to transactions that do not qualify as such, leading to unexpected charges for consumers.

Court: The class action lawsuit was filed in the Superior Court of the State of California.

A California woman is suing Capital One for what she says are unfair cash advance fees on its credit cards, claiming the bank charged her extra when she used her card for a Venmo transaction. 

Plaintiff Azlynne Hoard filed a class action lawsuit against Capital One N.A. on May 23 in a California county court, alleging deceptive practices and breaches of California’s Unfair Competition Law. 

Hoard claims that Capital One wrongly charges fees for purchases that are not actual cash advances, which violates the bank’s cardholder agreement and misleads customers.

“Capital One systematically and unreasonably treats payments made on peer-to-peer mobile applications as ‘cash advances,’ and systematically assesses Cash Advance Fees on such transactions,” the lawsuit states. 

“In so doing, Capital One breaches its contractual promises and breaches the covenant of good faith and fair dealing.” 

Venmo Users Hit with Surprise Cash Advance Fees, Capital One Lawsuit Says

Capital One, like other major credit card companies, charges cash advance fees when customers withdraw cash from ATMs or bank tellers, Hoard says. 

However, she alleges that Capital One has been applying these fees to regular credit card transactions that do not qualify as cash advances. This practice not only breaches the cardholder agreement but also deceives cardholders, she says.

The cardholder agreement permits Capital One to charge cash advance fees on transactions it considers cash equivalents.

But Hoard says that Capital One uses this clause in bad faith by not clearly defining what it considers a cash equivalent, leading to unexpected fees for consumers. 

For example, Hoard was charged a cash advance fee and immediate interest for using her credit card through Venmo to pay for a beauty treatment — a transaction she did not expect to be treated as a cash advance.

Capital One's Cash Advance Practices Under Fire: Are Venmo Payments Misclassified?

Hoard also claims that Capital One's practices are not aligned with industry standards. 

She says competitors like American Express and Discover do not charge cash advance fees for transactions similar to her beauty treatment payment. Plus, other banks provide clearer guidelines on what constitutes a cash equivalent, which Capital One fails to do, she states.

In the Capital One cash advance fees class action lawsuit, Hoard is looking to represent all Capital One credit card holders who were unfairly charged cash advance fees for non-cash transactions. She is seeking treble damages, fees, costs and a jury trial, along with an order from the court preventing Capital One from charging the allegedly unfair fees.

In June, Capital One agreed to pay a $16 million settlement to end claims that the bank unlawfully charged customers unlawfully for non-sufficient funds fees. 

Case Details

• Lawsuit: Azlynne Hoard v. Capital One N.A
• Case Number: 3:24-cv-01133-mma-vet 
• Court: Superior Court of the State of California 

Plaintiffs' Attorneys

• Sophia G. Gold, Jeffrey D. Kaliel, Amanda J. Rosenberg  (Kalielgold PLLC)