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Did you OK a visit from Capital One?

By Danny Cevallos, CNN Legal Analyst
May 28, 2014 -- Updated 2053 GMT (0453 HKT)
A Capitol One branch reflects a New York building. The bank said it does not send debt collectors to homes or offices.
A Capitol One branch reflects a New York building. The bank said it does not send debt collectors to homes or offices.
STORY HIGHLIGHTS
  • Capital One cardholder contract said it can make a "personal visit" if you owe money
  • Danny Cevallos: We check "yes" on long online contracts without really reading them
  • Cevallos: These contracts might be sneaky, but aren't we responsible if we sign them?
  • Cevallos: Capital One said it's an oversight, just a boilerplate contract, and no one will visit

Editor's note: Danny Cevallos, a CNN legal analyst, is a criminal defense attorney practicing in Philadelphia, New York and the U.S. Virgin Islands.

(CNN) -- Capital One wants to know what's in your wallet. It also wants to know your address, so its representatives can come visit if you owe money.

At least, those are the accusations leveled at the credit card giant this week.

At first blush, it seems that Capital One would be barred from this activity by federal law. Specifically, the Fair Debt Collection Practices Act outlaws even less-intrusive behavior. Under the act, debt collectors are prohibited from making repeated phone calls, calling before 8 a.m. or after 9 p.m., or even calling at times the collector should have known are inconvenient.

Danny Cevallos
Danny Cevallos

Certainly, the debt collection act would frown upon showing up at a debtor's home. It would. The problem is, the act protects debtors against abusive collection tactics by third-party debt collectors and debt buyers only. It does not apply to the original creditor.

There's nothing in the debt collection act that prevents Capital One from showing up at your home: In fact, the law doesn't prevent the original creditor from doing anything. As long as no other law bars this activity, the parties -- consumer and credit card company -- appear to be free to enter into a contract.

Capital One's rules said customers can be contacted by mail, phone, e-mail or "personal visit." Does that mean consumers can unwittingly agree to their credit card company showing up at their door because they missed a payment?

Modern contract law is on a collision course with technology. Historically, contracts have been paper, detailed in a reasonable number of pages. The expectation that a consumer would read an entire contract was not unreasonable. Today, the price of existing in the modern world is hastily clicking our assent to an endless number of "clickwrap" agreements, often dozens of pages long, where you simply scroll through and check a box to complete your purchase.

Because we all depend on the Internet to a large extent for goods and services, most of us grit our teeth and agree.
Danny Cevallos

Sure, you can read all the fine print, if you have an extra four hours a day. And if you don't agree with Section 109(g)(3) of some online purchase agreement, you can refuse to click -- but then again, who loses? Now, you can't order those commemorative plates or pair of shoes for delivery. None of these contract terms is negotiable. They are all "take it or leave it." Because we all depend on the Internet to a large extent for goods and services, most of us grit our teeth and agree -- Section 109(g)(3) and all.

Contract law has been slow to acknowledge this reality. Courts have upheld these online "agreements" based on the contract principles that consumers should read every page of an agreement before they sign it. That advice is still sound today -- but is it reasonable? Is the only other option to wander the Earth as the lone Luddite, disconnected from progress and civilization? Perhaps contract law should intervene to prevent the mega-corporation from sneaking or forcing contract terms upon an unsuspecting public.

But wait. The social implications of this suggestion are equally ominous: Are we entering an era where citizens cannot be expected to take responsibility for the contracts they enter into? On one hand, it seems wrong that corporations, with their legal teams, should be permitted to impose 50 pages of one-sided terms upon the average Joe. On the other hand, have we the people gotten to the point where we aren't competent enough to be responsible for the contracts we willingly sign?

We the people apparently are not alone. Even Capital One doesn't understand its contracts. Capital One was quick to release a statement saying that it does not visit cardholders, nor does it send debt collectors to homes or offices.

Capital One will maintain that the credit card rules sent to cardholders have the same language as those sent to anyone who buys a car or sports vehicle through a secured loan from the bank. If those buyers default, Capital One has acknowledged that its representatives might actually visit those homes to repossess. That's fine, but why did the cardholders receive the same contracts?

The bank is considering creating two separate agreements because this language doesn't apply to the general cardholder base. That's fine, but why did the change come only after bad press?

Notice one common theme? All the misunderstandings, the accidents and the oversights seem to accrue to the benefit of Capital One. Coincidence? Accident? I'm sure it is. Credit card companies always have their customers' best interests at heart.

And if you're not convinced, just ask them ... when they ring your doorbell.

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The opinions expressed in this commentary are solely those of Danny Cevallos.

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