February 19, 2014

What’s the problem?   Capital One has always been a fun and friendly financial services firm.  They have been bold about it.  Going where no financial services firm has gone before…I’m talking to you David Spade, “E-I, E-I-NO!”  But now bold has gone to a whole new level.  They are brazen.  They recently sent a contract update to cardholders that states that “we may contact you in any manner we choose” and that such contact can include calls, emails, texts, faxes or a “personal visit.”  As if that weren’t invasive enough, they even specify that these visits can be “at your home and at your place of employment.”  To make matters worse, they have questionable caller ID practices, stating: “We may modify or suppress caller ID and similar services and identify ourselves on these services in any manner we choose.”  Gross, CapOne.  Just gross.  What’s next?  Is David Spade going to come knocking on my door?  My colleague Chris Manley was right.  This language IS just creepy.  As he said, it is “totally horrifying and straight out of Orwell or Vonnegut.”


What’s the worst part?  Oh… I’m not sure where to begin.  But, after a quick poll of my workplace we had a tough time deciding which little nugget was worse—they gave us so much to work with!  But, we all agreed that when they said, “we may contact you in whatever manner we choose,” including a “personal visit,” they crossed a line.  Have they even heard of being customer focused?  This just in CapOne, customer focused means customers first.  Read:  I don’t want you in my living room or my workplace.  Finger-wag CapOne.  Finger-wag.  This is basic stuff.  Why did you have to say that?  If I said it once, I have said it a million times (well all of us here at m+p have): it’s not what you say… it’s what they hearTM.  So… CapOne, this one is for you.



Who’s to blame?  This is a case of lawyers run wild.  We see this in the work we do all the time.  Yes, lawyers need to protect their companies.  And if these few creepy words weren’t in the contract there is no doubt that a credit card company showing up at someone’s house could legally constitute harassment.  So the lawyers were doing their job.  Unfortunately, the communications team was not.  What Capital One failed to understand is that the trust in their company—and their entire brand imagecan be ruined by one line of text in a contract.  This stuff matters.  So communications and marketing teams around the world, my advice to you is pay attention to the fine print too.  It’s not just the headlines, glossy print, and advertisements that matterit’s EVERYTHING you say.   


Who is impacted?  Well, duh.  Obviously customers.  But I bet that there are a few other folks impacted as well.  And, based on how tone deaf they seem to be, CapOne clearly doesn’t understand the impact this misstep can have on their key stakeholders beyond their customer base.


  1. Investors.  What does this say about the credit rating of CapOne’s portfolio of debt?  My guess is that it’s not good.  If I were an investor or an analyst, I would be taking a second look at their cardholder base big time.  If the story gets bigger we might see their stock price shrinking as a result.
  2. Regulators.  Gosh, can you imagine what a field day the Hill is going to have with this story?  This is like a gift to the staffers working on the side of increased regulation on financial services firms.  Have at it Capitol Hill.  Have at it.  I would if I were you.
  3. Prospects.  If it’s a gift for DC, it’s even more of a gift to their competitors.  If I were in the market for a new card and I saw this headline I would run, not walk in the other direction.


How should they respond?  Unfortunately, they already did.  And they clearly did it before they called us.  Their response shows how very tone deaf they are.  They made the three mistakes I see companies making all the time when responding to a wrongdoing:


  1. Failing to take responsibility.  Does it help us to know that this language has been in the contract for a long time and is just now coming to light?  They thought so.  That’s probably why they told us.  Does it really?  Absolutely not.  CapOne learn this now: you are responsible for your actions no matter how long they have been in place.  Own your mistake.  You made one.  And this one could be costly if you don’t own up to it.
  2. Responding to the wrong issue.  They did this across the board. 
    • Visits at home or at work.  With statements like, “Capital One does not visit our cardholders, nor do we send debt collectors to their homes or work.”  Really?  The issue isn’t that they have made these visits in the past.  The issue is that they might in the future.  Enough said.
    • The caller ID issue.  When it came to addressing the caller ID concerns, and they said their policy was about some “local phone exchanges” who “may display our number differently,” they were not being intellectually honest.  Do I believe that for a second?  No.  It seemed like they were shirking the issue.  That explanation just didn’t seem to line up with the contract which talked about “modifying or suppressing” their caller ID details, drawing up images of predatory telemarketers.
  3. Responding with an action…But the wrong one.  We have seen companies turn trust around in these types of situations before.  Companies mess up.  And when they do, they earn back trust by making a symbolic gesture that addresses the concerns of their customers.  Think of NetFlix.  Or Coke withdrawing New Coke from the market and returning to the original recipe (thankfully).  In both instances they did the right thing by responding to their customers' concerns.  CapOne failed.  They offered to “rethink the wording” on their contracts.  Really CapOne?  You can do better than that.


Will this impact trust in CapOne?  Yes.  But it’s their response that will define how much.

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