While Walmart increasingly turns its focus online to bring in customers, Target is doing the opposite, doubling down on efforts to get customers inside its physical stores. To that end, the company will open dozens of new stores and remodel another 1,000 in coming years.
Target announced today that it would build on its previously unveiled initiative to remodel stores in a way that is more convenient for customers and encourages them to stick around, and you know, shop some more.
The expanded plan will see Target add 325 additional stores to its list of to-be-remodeled locations.
Previously, the company said it would remodel more than 600 locations through 2019. Now, the retailer says it will remodel more than 1,000 stores through 2020.
The decision to add to the number of remodels came after Target saw an increase in sales at recently redesigned locations.
CEO Brian Cornell said at an event marking the opening of a New York City store today that the retailer experienced a 2% to 4% sales boost at the locations, The Minneapolis Star Tribune reports.
The remodels, which will be customized based on customer feedback, will feature stenciled floors, unique lighting, and wood-paneled walls and beams, Target previously announced.
One entrance will be for customers in a rush, complete with an online order pickup counter close by and grab-and-go food and beverage displays near the exits. This section will also house the stores’ groceries and new beer and wine section.
The second entrance will contain merchandise displays meant to grab customers’ attention in the hopes they’ll make purchases. The store will also feature outdoor space for those times when guests are just wandering around the store avoiding their family.
Additionally, the new Target stores will have curved, more circular center aisles that will feature merchandise displays to engage guests with compelling products.
In addition to remodeling more than 1,000 existing stores, Target says it will also accelerate the opening of new locations, including its smaller-format design.
Target is opening 32 new stores in 2017, with plans to open 35 new stores in 2018.
Cornell noted today that building the smaller-format locations — typically located in urban areas and near colleges — has provided the company with a set of untapped customers.
“The majority of shoppers are brand new to Target,” Cornell said of customers to the smaller-format locations.
So far, Target has opened 55 small-format stores, but expects that number to increase to 130 by next fall.
Have you ever stashed a spare shirt in your bag in case you spilled something, or brought along a spare pair of shoes in case you got a blister? Former General Electric CEO Jeff Immelt reportedly took similar precautions: According to company insiders, he brought an extra jet along with him on some business trips in case the first one broke down.
Jets, of course, aren’t something that you can stash in your messenger bag or the trunk of your car. According to “people with knowledge of the situation” who spoke to The Wall Street Journal, Immelt had another empty plane follow his jet on some trips.
The crews were told not to discuss the spare jet, and the two planes sometimes wouldn’t even park near each other, making it less likely that onlookers would connect them.
A spokesperson for GE told the WSJ that Immelt didn’t always double up on planes when he traveled, explaining, “Two planes were used on limited occasions for business-critical or security purposes.”
This news is coming out now because Immelt is no longer in charge, and his successor, John Flannery, started his time in the top job by grounding all of GE’s corporate jets, at least temporarily.
He’s conducting a “strategic review” of the entire business, which will involve even bigger cost cuts than grounding the extra private planes. Another visible cost cut will be ending the program of company cars, which around 700 executives have.
There are always patent lawsuits and challenges happening around the country. But the new trend in patent suits — from major, established drug companies to fly-by-night outfits alike — seems to be an attempt to get a leg up by using tribal sovereignty to avoid certain parts of the process.
Patents, at their core, are designed to give some innovative party exclusive rights to make the thing they thought of for a certain period of time. They’re a legal tool to create incentives for research, development, and invention: If your efforts lead you to create a brand new widget, then we, the government, will give you the exclusive right to make and sell that widget for a while, so you recoup your costs and make a bit of profit, too.
But that means patents themselves — and not just the things they describe — are extremely valuable. And anything with value can be bartered, sold, traded, and sometimes abused in the name of money.
Patent trolls, for example, are an entire category of individuals and small businesses that exist to buy up patents for things, then sue anyone they can think of who may be using that patented thing. Most entities settle, and so a decent troll can make a steady stream of income through the courts.
Much in the same way that payday lenders have tried hiding behind tribal affiliation in order to skirt laws regulating debt instruments, some patent holders are now shifting their patents to native tribes in order to try to skirt review or prevent competitors from arising.
Allergan owns the patents on the dry-eye drug Restatis, which you’ve probably seen TV or magazine ads for.
In recent months, the company had been facing a legal challenge to its Restasis patents, however. And so Allergan tried a workaround: It transferred all of the patents for Restasis to the Saint Regis Mohawk Tribe in New York.
Under the agreement, the tribe became the patent-holder — but immediately granted Allergan an exclusive license to use the patents. For sitting on the ownership and letting Allergan do its thing, the tribe got more than $13 million up front and up to $15 million in annual royalties thereafter.
“I believe it’s novel,” Allergan CEO Brent Saunders told CNBC at the time.
But giving the tribe ownership of the patents can’t protect the patents from being thrown out in court — and that’s what happened anyway, a month later.
In a ruling [135-page PDF] issued Monday, U.S. Circuit Judge William Bryson not only invalidated the patents, but also made very clear he thought Allergan’s “novel” legal strategy was a terrible idea.
“The court has serious concerns about the legitimacy of the tactic that Allergan and the Tribe have employed,” Bryson wrote. “When faced with the possibility that the PTO [patent office] would determine that those patents should not have been issued, Allergan has sought to prevent the PTO from reconsidering its original issuance decision.”
“What Allergan seeks,” Bryson concluded, “is the right to continue to enjoy the considerable benefits of the U.S. patent system without accepting the limits that Congress has placed on those benefits.”
Further, Bryson noted, “If that ploy succeeds, any patentee facing [review] proceedings would presumably be able to defeat those proceedings by employing the same artifice.”
And Bryson was indeed correct: Allergan is far from the only entity trying to use tribal sovereignty to skirt around patent law.
Amazon and Microsoft are both also facing patent suits from the Saint Regis Mohawk tribe, Reuters reports. In this case, the other patent holder trying to skirt review is a company called SRC Labs
Apple is also facing a patent-troll style lawsuit over patents owned by a new entity called MEC Resources, Ars Technica reports. And MEC Resources is owned in its entirety by the Mandan, Hidatsa, and Arikara Nation (Three Affiliated Tribes).
Three years after General Motors recalled millions of cars that contained a ignition switch defect that was ultimately linked to more than 120 deaths, the carmaker is finally closing another chapter of the saga. The company will pay $120 million to resolve allegations that it failed to disclose the safety defect in a timely manner.
The settlement puts an end to a years-long multi-state investigation that aimed to determine if GM failure to properly address the dangerous safety defect.
“Instead of prioritizing customers, General Motors turned a blind eye for years and chose to conceal the safety defects associated with several models of their vehicles,” New York Attorney General Eric Schneiderman said in a statement.
In all, 49 states and the District of Columbia will receive $120 million from GM, while the company has also agreed to complete all applicable repairs and no longer misrepresent vehicles as “safe” until they comply with federal safety standards.
Arizona was not included int eh settlement, as the state had filed its own lawsuit against GM.
According to the states’ complaint [PDF], General Motors and certain employees knew as early as 2004 that the ignition switch found in millions of vehicles contained a safety defect that could cause an airbag to fail to deploy in the event of a crash.
The states contended that General Motors Corporation (GM before its 2009 bankruptcy restructuring) knew prior to the switches going into production in 2002 that the device was “prone to movement out of the ‘run’ position, but that production was approved regardless.”
Starting in 2004 and 2005, GM customers and employees began experiencing sudden stalls and engine shutoffs caused by the switch.
In late 2004, the company opened the first of six engineering inquiries into the switch; this was meant to consider changes to the device. That inquiry was closed “with no action.”
Despite this purported knowledge, the suit alleged that GM did not issue a recall of these dangerous vehicles until nearly 10 years later.
Instead, the company decided the issue wasn’t a safety concern, and continued to market the vehicles as reliable and safe, the suit claims.
Finally, beginning in Feb. 2014, GM issued seven recalls affecting nine million vehicles that contained the ignition switch defect.
The states alleged that GM’s inaction and reiteration that vehicles were safe constituted unfair and deceptive practices in violation of state consumer protection laws.
To resolve these claims, GM will no longer represent a vehicle as “safe” unless it complies with the Federal Motor Vehicle Safety standards; will only represent that certified pre-owned vehicles are safe if they do not have open safety recalls or those recalls have been addressed; and will instruct dealers that all recall repairs be made before a GM vehicle is sold in the U.S.
A long time ago, in a ride-hailing era that now seems far away, Google and Uber were friends, with the internet giant plugging $258 million in Uber in 2013. Four years later, the two sides are embroiled in a legal battle over self-driving cars, and the tech company is pouring money into Uber’s biggest rival, Lyft, instead.
Lyft announced today that Alphabet’s investment arm, CapitalG, led a $1 billion round of funding in the ride-hailing company. CapitalG partner David Lawee will also be joining Lyft’s board of directors.
It’s not like no one saw this coming: Things first started to go sour between the two comapnies back in 2015 amid speculation that Google was interested in starting its own ride-hailing service.
The relationship got a lot more tense when Google’s self-driving-unit Waymo sued Uber, claiming the company stole trade secrets.
Then a few months later, Waymo and Lyft announced they were working together on autonomous vehicles.
This investment was also the subject of speculation last month, when rumors started to swirl that Alphabet was considering a $1 billion investment in Lyft, buzz that has now been borne out with today’s news.
Chocolate isn’t just delicious (although it definitely is); according to some studies out there, it’s good for your health, too. But as you’ve probably guessed, the research supporting that idea isn’t exactly objective: It was commissioned by chocolate makers
Yes, Vox reports, companies like Mars have paid for studies that show chocolate is good for study subjects’ hearts and circulatory systems.
“Keep in mind that too much of anything is not really good,” a chocolate historian (yes, that is an actual thing) at Yale University told Vox. “If you’re hooked on chocolate, you’re hooked on sugar.”
Marion Nestle, a nutrition researcher who is not related to the food conglomerate that also makes chocolate products, told Vox that chocolate companies “made a conscious decision to invest in science to transform the image of their product from a treat to a health food.”
Nestle has cataloged chocolate research funded by snack companies, noting that Mars even markets a “cocoa flavonol” dietary supplement for heart health, even though the product was originally developed as a snack. Why? Supplement-makers can make broader, if more vague, claims about what their products do than if the same product were sold as a food or a drug.
Vox’s review of chcoolate studies funded by Mars found that 98% of what was published had positive results. It’s not necessarily that researchers deliberately skewed their projects, or that Mars prevented negative studies from being published. Mars may have only approached researchers whose work was already choco-friendly, and simply funded them to perform more of it.
We’re sorry to tell you that while specific compounds in chocolate are linked to improved health, these effects are less pronounced in studies that aren’t funded by the candy industry, and in any case, chocolate itself is not good for your health. Research on flavonols is promising, but those compounds are mostly processed out of the chocolate that we snack on.
The thing is, chocolate isn’t the only source of the plant-based chemicals, flavonols, that can have a positive effect on our health. You can also get these substances by drinking tea or eating, say, apples, cranberries, kale, onions, or pears. Bonus: Apples and pears contain sugar naturally, but don’t come with huge doses of added sugar and fat like even dark chocolate does.
For as long as we can remember, paying with a credit card required you to sign your name on the dotted line. While this system has changed over the years — mandating your John Hancock only for purchases over a certain amount — MasterCard is perhaps planning the biggest change of them all: The payment company will eliminate signature payments altogether.
Starting in April 2018, MasterCard users will no longer be required to sign their name when they purchase something using their debit or credit cards.
The change comes as the company has eliminated signatures over time. To date, the company says that just 20% of transactions in North America still require a signature at checkout.
By doing away with signatures, MasterCard says it is taking another step in its “digital evolution of payments and payment security,” while also providing convenience for customers.
“At first glance, this might sound like a radical proclamation, especially to people who have had credit and debit cards for decades,” Linda Kirkpatrick, executive vice president of market development at MasterCard, said in a statement. “However, the change matches all of our expectations for fast and convenient shopping experiences.”
According to MasterCard’s own consumer research, the majority of people believe it would be easier to pay and that checkout lines would move faster if they didn’t need to sign when making a purchase.
As for security, MasterCard assures customers that removing the need for signatures at the time of checkout will not impact the safety of their purchases.
For starters, shoppers generally just scribble their name in the “sign here” box at checkout. Often those signatures aren’t checked against anything, otherwise we’d probably have a lot more denied transactions.
MasterCard notes that its network and payment system already include other methods to prove someone’s identity, including the use of chips, tokenization, and personalized identification numbers.
“Beyond what you see and experience at checkout, there is behind-the-scenes technology at work every second of every day to protect every transaction,” Kirkpatrick notes.
MasterCard’s impending signature change has already been greeted with support from merchants.
Kirkpatrick says the move will help partner merchants speed customers through checkouts, provide more consistent experiences, and decrease the costs associated with storing signatures.
The Retail Industry Leaders Association — which counts a number of major retailers, such as Apple, Best Buy, Gap, Target, Walmart, and others as members — called MasterCard’s end of signature requirement a “good first step.”
The change addresses retailers’ long-argued position that signature requirements are costly, and a now less relevant way to secure transactions.
“RILA supports this policy change and encourages other payment networks to follow Mastercard’s lead,” Austen Jenson, president of government affairs for RILA, said in a statement. “Going forward, the payment industry needs to focus on finding solutions to the growth of fraud both in stores and online, where current measures are inadequate for protecting consumers and merchants.”
You may not know how many licks it takes to get to the center of a Tootsie Pop lollipop, but anyone who’s ever gone trick-or-treating knows Tootsie Roll well. That could be a problem for the candy company, according to a new report that says the confectioner is relying too much on nostalgia at the cost of innovation.
In a report titled “All Tricks, No Treats,” Spruce Point Capital Management predicts that Tootsie Roll Industries stock could drop by 25-50% because the company is stuck in the past and isn’t innovating as much as its competitors.
Spruce Point says the more than 100-year-old company’s brands — including its namesake candy as well as Andes mints, Dots, and Sugar Daddy — are “withering along with its core customers.”
“In Spruce Point’s opinion, Tootsie Roll’s historical success is tied to consumer nostalgia around select products and children’s craving of sugary snacks,” the report said.
Sales haven’t grown in six years, claims Spruce Point, estimating that Tootsie Roll is losing market share.
“Our channel checks reveal it uniformly receives the worst product placement on the shelves” especially during the Halloween season, Spruce Point says.
For example, it found that Tootsie Roll products were often on the bottom shelf at stores like Target, Duane Reade, and Walmart — while other brands enjoyed eye-level placement — and absent from checkout counters — where impulse purchases like candy often happen.
And while competitors like Hershey have experimented with “healthy and indulgent snacking,” Tootsie’s products “fail to address consumer demand for healthier products.” Instead, Spruce Point says the company has stuck with going after the younger set, resisting “industry self-regulatory movements” to limit marketing to children.
This, despite the fact that Tootsie Roll’s labels show it has shrunk its serving size, “an implicit acknowledgement consumers are eating less candy,” Spruce Point notes.
We’ve reached out to Tootsie Roll for comment on Spruce Point’s report, and will update this post if we receive a response.
With more and more consumers cutting the cord and ditching their cable providers, these companies have to make up the lost revenue somehow. That apparently means increasing costs elsewhere, like your broadband.
Nasdaq reports that companies like Charter and Comcast have increased the cost of broadband services in recent months as one-time customers flee in favor of services like Netflix or Hulu.
A recent survey from Morgan Stanley found that cable companies have increased broadband prices by an average of 12% in the last year.
The increases have hit broadband-only customer the most, with the average bill now sitting at around $66/month.
In contrast, customers who have a broadband/cable bundled package pay on average $49/month for the broadband service.
Despite the double-digit cost increases, analysts believe the new prices might not be enough. Instead, companies would need to set their broadband-only prices to $80/month in order to offset the lost revenue from cord-cutters.
To that end, the companies will likely continue to increase their broadband prices.
Sure, you may have a preference when it comes to ordering fancy drinks on a flight, but would you be ticked off enough to sue over bubbly that is not actually Champagne?
A man who flew on a Sunwing Airline flight from Quebec to Cuba last year says he was expecting an advertised complimentary “champagne service” as part of his travel package, but that instead of receiving a glass of bubbles from France’s Champagne region, he was served another kind of cheaper sparkling wine, reports The National Post.
He’s now filed a lawsuit seeking class-action certification demanding compensation for the difference in cost of the beverage as well as punitive damages.
This incident — which only happened on one leg of his flight — apparently popped his cork not because he’s snobby, but because he claims Sunwing’s advertising was misleading.
“You have to go beyond the pettiness of the (wine cost) per head,” the man’s lawyer told the National Post. “What’s important is you’re trying to lure consumers by marketing something, and you’re not giving them that something … It’s a dishonest practice.”
A search for Sunwing’s Champagne service does bring up a result for “Champagne Service – Sunwing,” but the landing page only notes “a complimentary glass of sparkling wine” (as long as the flight isn’t within Canada or to the U.S.).
The passenger’s lawyer told the National Post that the airline was still including “champagne” on billboards and in ads at airports until recently.
In a statement to Consumerist, Sungwing says that it used the words “champagne service” and “champagne vacations” as a way to “denote a level of service in reference to the entire hospitality package from the flight through to the destination experience,” and not as a reference to specific beverages it serves.
“Anywhere that we’ve detailed our inflight services, we have accurately described these as including ‘a complimentary welcome glass of sparkling wine’ across relevant marketing materials and even announce them on the aircraft,” Sunwing says, adding that it considers any legal action relating to the marketing of this service to be “frivolous and without merit.”
When you’re using eye drops and feel like you’re spilling half of each dose down your face, it’s not because you’re clumsy. You are, in fact, spilling what can be pricey medicine down your cheeks or into your sinuses, because most eye drop bottles dispense at least twice as much as you need.
Why would that be? A ProPublica report explains that liquid medications are sold by volume, and drug companies don’t really have any incentive to help us use them up any more slowly — whether they’re inexpensive over-the-counter moistening drops or a glaucoma medication that costs hundreds of dollars per bottle.
In this case, more medicine isn’t better: Eye drop bottles dispense as much as 50 microliters per dose, when the eye can only hold less than half that amount of liquid.
ProPublica interviewed a chemist who was on the team at Alcon (now part of Novartis) that figured out how to dispense medication in a 16-microliter drop that was just enough medication to coat the eye. A study of glaucoma patients showed that the smaller amount of medication was effective.
The research was published 25 years ago, which means that pharmaceutical companies have had plenty of time to change their bottles and reduce waste.
Alcon didn’t want to take the risks needed to get its microdrops on the market. A different dosage of eye medication would need its own approval from the Food and Drug Administration, requiring more studies to prove that the smaller dose is just as effective. It would also reduce sales, putting the company at a competitive disadvantage if it had to raise the price of products dispensed in microdrops.
“[Drug companies] had no interest in people, their pocketbooks or what the cost of drugs meant,” one ophthalmologist told ProPublica, explaining what happened when he has asked drug companies why they can’t make drops less wasteful.
Remember that the next time your eye drops run down your face: Millions of dollars are wasted every year because no pharmaceutical company wants to be the first to make this change.
On the surface, Walmart and luxury department store Lord & Taylor don’t have a lot in common outside of selling clothing. But that could soon be changing.
The Wall Street Journal, citing people familiar with the matter, reports that the two companies are in talks to team up to take on every retailer’s rival, Amazon.
Sources say the unlikely duo are close to inking a deal that would see Lord & Taylor receiving a dedicated space on Walmart.com to sell its products.
The potential partnership could be beneficial to both parties.
Like other department store chains, Lord & Taylor — owned by Saks Fifth Ave parent company Hudson’s Bay — has been struggling in recent years to keep customers in the door.
Back in June, Hudson’s Bay cut more than 2,000 jobs as it scaled back its workforce. News of the employee downsizing came on the same day that the retailer reported a 3% decline in retail sales to about $2.37 billion (or $3.2 billion Canadian) for the first quarter of 2017.
By selling products on Walmart.com, the company would be tapping into another avenue for sales — and customers — it might not otherwise reach.
Additionally, the partnership would add convenience for Lord & Taylor customers. For instance, sources tell The WSJ, that eventually, customers who make purchases from either Lord & Taylor’s website or from Walmart’s could pick up those orders at their local Walmart store.
On the other side of the deal, offering higher-end clothing and other products could be Walmart’s way of trying to attract customers with more disposable income.
The idea is if these customers purchase more expensive clothing from Walmart.com, they might stick around and buy other things, like groceries.
The possible deal is just the latest effort from Walmart in turning its focus toward online sales.
Walmart is looking to create a website that would mirror a mall, where customers could shop from a variety of different brands, including those the retailer has already purchased, such as Modcloth, MooseJaw, and Bonobos.
This brand-heavy website would also be similar to something else we’ve already seen: Amazon’s marketplace.
Rumors of talks between Walmart and Lord & Taylor come just a week after Walmart e-commerce head Marc Lore highlighted his plans for the retailer’s website.
The WSJ reports that Lore’s immediate plans for the site included “elevating the Walmart.com brand by redesigning the site and creating partnerships with more premium brands.
Despite Walmart’s push to increase its online presences — buying online retailers and revamping its shipping services — the company still has a long way to go before catching up to Amazon.
For instance, The WSJ reports that while Walmart is positioning itself as the only company with the ability to beat Amazon, the retailer’s website receives just half the visitors Amazon’s marketplace sees.
When you park your car, you expect for it to stay parked. Yet, that might not happen in nearly 310,000 Toyota minivans that may contain an extra greasy shift lever.
Toyota announced Wednesday the recall of 310,000 model year 2005 to 2007 and 2009 to 2010 Sienna minivans after discovering an issue with the shifting lever.
According to the carmaker, grease inside the shift lever — that thing that makes your car go from park to neutral, driver, or reverse — can transfer to internal components, causing them to function improperly.
This could allow the shift lever to be moved out of the “park” position without the brake pedal being depressed.
If this occurs when the parking brake isn’t engaged, it could lead the vehicle to roll away, increasing the risk of crash.
It is unclear if Toyota has received any injury or crash reports related to the issue.
Consumerist has reached out to the carmaker for additional information.
Owners of the affected vehicles will be notified of the recall by mid-December, and dealers will replace the shift lock with a new one, remove grease, and reapply the appropriate amount of grease.
As e-commerce giant Amazon and major grocery chains across the country crowd into the meal kit service arena, it seems Blue Apron may be feeling the heat: The meal kit company announced Wednesday that it’s laying off 6% of its workforce as part of a companywide “realignment” effort.
Several hundred employees will be realigned right out of the company, Blue Apron announced in a companywide email that it included in a recent filing [PDF] with the Securities and Exchange Commission.
The company says the realignment comes down to a reduction of about 6% of the company’s total workforce of around 5,000, both at the corporate offices and fulfillment centers.
“A companywide realignment, like the one we announced, is always painful, and especially so for a close knit team like ours,” CEO Matthew Salzberg wrote in the letter, noting that company leadership and the board didn’t “take this decision lightly.”
READ MORE: 7 Things We Learned About The Rapid Expansion Of Meal Kit Service Blue Apron
“I want to assure you that we believe it was necessary as we focus the company on future growth and achieving profitability,” Salzberg adds.
Things started to turn a bit sour for Blue Apron after its disappointing IPO in June, with stock sinking 17% in the first week after the offering.
Things only got worse when Albertsons announced in September that it was buying Blue Apron’s rival, Plated.
By now you’re probably used to going to your bank’s website and being upsold on everything from car loans to mortgages to retirement accounts before you can move on to see how your money is doing. But have you ever gone to your bank’s site only to be told you must update your income with the bank before going any further?
That’s what happened to Consumerist reader Sean, who was just trying to log on to CapitalOne.com, where he has both a savings account and a credit card, only to be faced with a demand for his latest income info:
He said he suspected it had something to do with him having a Capital One credit card, and acknowledged that other financial institutions had asked for such information in the past, but that he’d never seen anything “so intrusive” because there was no option to opt out. He was frustrated that he couldn’t access his non-credit card accounts without entering something in that field.
“Maybe it was just an error because I have a credit card with them too, but this feels really unethical,” Sean wrote, wondering if it was legal to require that information before allowing him to log in to see any of his accounts.
Although Sean felt Capital One was being intrusive, it’s not only legal for credit card companies to ask for income information, they’re also required by law to keep records of that info current: According to federal regulations, credit card issuers have to make an “ability to repay” evaluation when considering potential customers, or when contemplating credit increases to existing customers.
“A card issuer must not open a credit card account for a consumer under an open-end (not home-secured) consumer credit plan, or increase any credit limit applicable to such account, unless the card issuer considers the consumer’s ability to make the required minimum periodic payments under the terms of the account based on the consumer’s income or assets and the consumer’s current obligations,” states this ability-to-repay rule.
To accomplish this, card issuers may consider things like the ratio of the customer’s debt obligations to their income.
“It would be unreasonable for a card issuer not to review any information about a consumer’s income or assets and current obligations, or to issue a credit card to a consumer who does not have any income or assets,” the rule reads.
Capital One notes this on their web site:
“It’s important to make sure that all your personal info is accurate and current. Federal regulations generally require that credit card companies use up-to-date income information when considering an account for a credit limit increase,” the site reads. “Check yours at least once a year to make sure it’s accurate.”
Credit card companies don’t just rely on customers’ past disclosures, however. They may periodically reach out to them to make sure the information is still correct.
“It is important that we have current customer information for ongoing account management purposes,” the Capital One rep told Consumerist. “We conduct reviews regularly, and ask customers to update their info if it is either missing or dated.”
So again, while this may feel icky, it’s definitely legal — and could actually benefit you in the long run.
“While it may feel uncomfortable to be asked how much you make when you contact your credit card company, credit card companies have a legitimate reason for asking,” Christina Tetreault, our colleague and Senior Staff Attorney for Consumers Union, explains. “Having your income information helps credit card companies calculate how much credit they should offer you, and ideally means that you can manage to repay what you borrow.”
When Sean contacted Capital One on Twitter, a customer service representative told him that he was not required to provide that information before he could log into his accounts, and that he could enter “123” into the “Total Annual Income” field to bypass the option.
However, the bypassing method is not disclosed on the screen when Capital One requests the information, which could have been useful to Sean at the time he was attempting to log in. Instead, he had to reach out to Capital One on Twitter.
In an email from Capital One to Sean after his Twitter chat, a company rep said they were aware of his concerns, and “there not being an option to opt out without contacting us about how to bypass it.”
The company said it’s glad the social media rep alerted him to the bypassing method, and that it appreciates him “addressing these concerns for other customers in the same situation.”
As it turns out, the rep wasn’t just advising Sean to enter any old random numbers — and effectively lie about his income in the process — but was instead offering a workaround.
“We allow customers that contact us and are reluctant to provide their income to use a code to bypass the income field,” a Capital One spokesperson explained to Consumerist, noting that the “123” code will not show up as your updated income, it’s just a sign to the system that the information wasn’t updated.
But be warned: Entering a random string of numbers into this field could constitute fraud, as you’re effectively giving the bank inaccurate information about your income.
When customers apply for a credit card with Capital One, they attest that everything they’ve stated is correct, including information about them needed to manage their account, the company’s rep noted. For example, among other things, it needs your legal name, date of birth, Social Security number, and employment and income information.
But because frustrated customers may put in whatever numbers come to mind in order to access their accounts — say, $1,234,567 — Capital One says it performs “reasonableness checks” to help verify information provided by customers.
