• Report: #263246
Complaint Review:

Capital One Auto Finance

  • Submitted: Wed, July 25, 2007
  • Updated: Mon, December 29, 2008

  • Reported By:Bay Area California
Capital One Auto Finance
www.capitalone.com Internet U.S.A.

Capital One Auto Finance Preapproved check bounced, all of a sudden I'm not approved ripoff Bay Area, California Internet

*Consumer Comment: how long does it take capital one check to clear?

*Consumer Suggestion: Works great if you follow the directions.

*Consumer Suggestion: Hummm

*Consumer Comment: Is this really a rip-off or misunderstanding by the consumer?

*UPDATE Employee: The whole story is not being reported

*Author of original report: update on what's happening...

*UPDATE EX-employee responds: Something just doesn't sound right

*Consumer Comment: Capital one

*Consumer Comment: Kind of a Rip Off

*Consumer Suggestion: If your credit is so good

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I hope I read all these reports before I applied or Capital One Auto Loan..

Here's the Story..

3 weeks ago I traded in my rare car for a newer car.. long story short
I had a preapproved loan with the amount on the blank check provided.

After 1 1/2 weeks Porsche dealer called me that the check from Capital One had bounced. I have the preapproval document and check. I called capital one and told me that they need my income docs, so I said ok, i faxed it to them, then a week later all of a sudden they cant do a loan for me, and refuses to say why. I have a good credit score and high income.

So now, the car that I traded is sold, I'm stuck with a car that the trade in value is $10,000 less than what I owe plus taxes, the good thing is the dealer
is on my side, and wanted to call Capital One and they said they will have them buy the car for giving me a bogus approval or else, Porsche vs. Capital One.

I hope they get what they deserve, after reading all the comments here, I called my attorney as well, we are giving them until Friday to make it right, after that. all hell breaks loose. suckers!

Bay Area, California

This report was posted on Ripoff Report on 07/25/2007 10:41 PM and is a permanent record located here: http://www.ripoffreport.com/reports/capital-one-auto-finance/internet/capital-one-auto-finance-preapproved-check-bounced-all-of-a-sudden-im-not-approved-ripof-263246. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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#1 Consumer Comment

how long does it take capital one check to clear?

AUTHOR: Malik - (U.S.A.)

I follwed all the required steps for this loan apporval and so did the dealer. my problem is with the dealer now. they got a call from capital one giving them the okay to deposit the check. i payed a $650 deposit and i have already booked my flight and my reservation with the amtrak auto train for wednesday the 31st. the dealer is now saying they wont release the car unless the check clears and they recieve all the funds. they claim to have deposited the check on friday (26th). whats gonna happen if i get there wednesday(31st) and the capitol one check doesnt clear?

while capital one claims it takes only 2-3 business days for the check to clear, the dealer claims that they have dealt with capital one before and sometimes it takes 10 business days for their checks to clear.

at this point i cant get a refund for my travel.

why is the dealer not willing to give me the car, altought it has low-jack installed and they have recived the green light from capital one?
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#2 Consumer Suggestion

Works great if you follow the directions.

AUTHOR: Ralph Brooks - (U.S.A.)

Having just purchased a car with Capital One auto financing, I can tell you exactly where the complainant in this situation went wrong.

He did not, repeat, did NOT follow the directions included. Simple ones at that.

Capital One pre-approves you and sends you the check. Along with the check are several stipulations that you must fulfill before the check becomes active:

1. Proof of identification and residence
2. Proof of income
3. Stipulations of value regarding purchased vehicle:

-Car has to have a certain LTV (loan to value ratio). It doesn't matter if the check is good to $100,000; The max amount they will pay on a certain car depends on the bookout sheet for the vehicle. In my case, it was 120% of LTV (Wholesale value of car + 20%). Anything outside of that scope they will NOT finance. My BMW ended up coming in at even with wholesale, even with tax and title included. They had no issue with paying out all $18300 of my loan.

You have to provide a faxed bookout sheet for the vehicle (either a dealer letterhead or, in my case, a copy of the Blue Book or Nada page with the vehicle values highlighted) before they will approve the transaction.

In addition, things they consider 'specialty' vehicles may also not be covered; A Porsche could very well fall into this category.

In addition, many times the check will stipulate that it must be used at a franchised dealer (a dealer with an actual manufacturer franchise, e.g., Honda, BMW, Chevrolet, etc., not just a corner used car lot). This was the case with my car.

In short, the complainant in this situation freely admits that he wrote the check before doing ANY of the above. The paperwork is so clear and easy to navigate, I'm amazed that anyone could be daft enough to miss it.

Capital One blank checks work WONDERFULLY if you follow the directions. Don't come on here and complain because you can't follow directions.
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#3 Consumer Suggestion


AUTHOR: Dennis - (U.S.A.)

I think you are pointing the gun at the wrong person here.... This is worth a read.

From carbuyingtips.com;

Scam #5: The "Your Online Lender Bounces Checks" Scam
How the scam works: The dealer sees your bank draft from a credit union, or online car finance sites such as Capital One Auto Finance, HSBC Auto Finance or AutoCreditFinders. Not wanting to lose the extra gravy of selling you the car dealer's RISC financing, they refuse your bank draft, lying to you that "online lenders bounce checks." They will say "their checks always bounce, so we don't take them". But gee, the dealer is willing to provide you financing, at higher APR. CapitalOne and HSBC are household names and many car buyers already doubt the salesperson's lies. So they may also tell you "well, they take too long to pay us".

Some salespeople stop at nothing. If your lender was bouncing checks, we'd hear about it via federal investigations. I get daily emails from people who financed with Capital One Auto Finance, HSBC Auto Finance with no problem. I used Capital One Auto Financeto finance my new 2004 Lexus GX470 SUV. Lexus had no problems accepting my CapitalOne check. My friend financed 2 used cars with Capital One Auto Finance. There's nothing wrong with dealer financing if they can beat your best APR. If not, use your online financing. Unless you qualify for a manufacturer's 2.9% financing, online banks will beat the local banks used by dealers most of the time, and online lenders often beat credit union rates. If a dealer spews out this scam and refuses your online financing, you the customer need to retain control and refuse to buy from that unethical and slanderous dealer. There are plenty of ethical dealers who eagerly accept online loans without the lies.

How To Avoid The Scam: Tell the finance manager you're onto their scam, online lenders have been in business for years and fund loans without bouncing checks. Then get up to leave. You should also file a complaint with your state Attorney General's Office, because we need to make this scam illegal for dealers who force you into higher APR financing. I get emails on this scam often, and if the state attorneys do not know this is going on, they can't help us consumers. The federal government should wrap this into the Truth In Lending Act. Here's our link to all 50 Attorney General's Offices.
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#4 Consumer Comment

Is this really a rip-off or misunderstanding by the consumer?

AUTHOR: Dennis - (U.S.A.)

I have done business with Capital One since the mid 90's. They did have some issues in the beginning but they appear to have cleaned up their act. I have had no problems what-so-ever for the past 7-8 years.
I am well aware of their "Blank Check" offers as I believe most customers receive the offers unless you opt out.
When you receive the offer is states "UPTO $30,000" meaning you ARE NOT approved for $30,000 but some figure between $1 and $30,000! You must call the "800" number to which you will be given a figure based on Capital One's current information about you. However, if you read on through the fine print it will explain that it is ALL SUBJECT TO CERTAIN CRITERIA!!!!! You have to submit an application as you would for any loan, it then gives updated information, and then a final determination is made!

At that time, you have the option of regular mail or for $15 you can have overnite delivery of your blank check. YOU MUST STILL PROVIDE SPECIFIC INFORMATION to Capital One before the check is valid! It's all in the fine print!
Don't get me wrong, I'm not defending Capital One by any means as we all well know the financial industry comes in number two with corruption, right behind politicians and lawyers! However, there are numerous agencies regulating these industries that you can turn to for assistance should you believe you have been scammed!

Wish you the best of luck but do your homework! Lawyers take cases regardless of whether they win or lose---they still get paid! GET PAID-GET PAID-GET PAID!!!

Are you getting my drift here?????????????
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#5 UPDATE Employee

The whole story is not being reported

AUTHOR: Sid Icarus - (U.S.A.)

There is any number of reasons you could be in the position you are in right now.
The blank check is not the same thing as a check you write from your own account.
There is any number of reasons you could have been denied for your loan. You can be pre-aproved for a paticular amount, $30000.00 for example. You walk into a dealership with your trade-in, and after the deal is done the total comes to $29500.00... the loan can still be nixed by the lender.

Well for one, what was your trade in worth? The negative equity (if any) in your trade-in is added to the purchase price of the vehicle. If the negative equity in your loan puts the total purchase price of the vehicle over a threshold, say 120% of the market vehicle you are buying, the loan will be 86'ed in a heatbeat. This is not a Capital One thing, this is what any responsible consumer lender would do and it happens all the time. If you bring too much negative equity into the deal it increases the likelyhood you will default on the loan. This happens a lot when people try to buy a car at a premium over the market value. COAF does not care if a 1991 Honda CRX has a $15,000 stereo system in it, they will not approve a $16,000 loan for a car the books say is worth $2500.

However, if what you have said so far is even kinda true, it sounds like you might have overstated your income. Again, the loan would be nixed in a heatbeat.

I also doubt the validy of your assertion that COAF would not tell you the reason your loan was denied. Provided the information you gave was accurate, COAF would love to have more business.
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#6 Author of original report

update on what's happening...

AUTHOR: Alex - (U.S.A.)

I understand everyone's point, but I leased/buy 10 cars in 3 years time.

The reason I chose capital one is because I wanted to keep this particular car it was 1 of 300, and they were the first one that gave me approval. I was planning on moving to Credit Union later one, but needed the funds asap.

The wrong thing that theyre doing is they never entertained me or the dealer.

It seems like they're suspecting Fraud, no response. after i faxed all the necessary paperworks, they wouldnt talk to me at all or even the dealer. they just said there's nothing we can do for you. seems weird.

So the dealer told me maybe they suspect fraud, since my credit shows i owned 8 cars less than 3 months time. so what?

If Porsche can finance me who the hell is Capital One? LOL so funny.

So now my attorney have all the paperworks, returned check, approval form from the web, and I have the dealership as a witness that they verified that I was approved for the amount. now what?? they are banned from this Porsche dealer and there's a memo not to accept checks from them.

I'm only suing for a pretty small amount maybe a value of a new 997S.

My attorney is pretty certain , will all my paperworks, they will not contest.

And for the ex employee, thanks for your advice, i appreciate it. but I've been buying cars for 15 years and financed/lease at least 25 cars. I am not new to this thing, i know more than 5 dealers. that dont accept checks from capital one most of them Audi/bmw/ porsche dealers.

I am a long time member of almost every Porsche, Audi, bmw,ferrari, lambo and mercedes forum. we'll see. they were wondering why i sold back such a rare car. i will be posting it soon. we have over 40,000 members on these forums.
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#7 UPDATE EX-employee responds

Something just doesn't sound right

AUTHOR: Scott - (U.S.A.)

Well, I general give an intro of my work for COAF & such, but I'll just get right to it. Te Blank check deal has a few tiers to it. you say that you have very good credit & if your sights were on a porsche i'd say it was was. Now for you COAF would have sent the offer & returned to you thew pre-approval with a blank form that looks likfe a check. It would have showed the range of what you were pre-approved for. This is not a VALID CHECK!.

If you took this to the dealership with your trade in & they tried to cash it - they didn't read the paperwork. You had some documents that you had to return in order to have your final approval. I have NEVER, NEVER heard of a COAF blank check that was bounced. I have heard of documentatio that was not received & when it was caught a freeze was placed on the check. You see the fine print states that we have the right to hiold funds until all documentation has been turned in.

Now as for the dealership, it's a good theing that they are working with you especially since they can keep you blinded to the fact that they did something illegal. Per your story you traded in a vehicle along with turning in the COAF check. Now the dealership has sold the one that you traded in, while giving you a lowere valued vehicle. (Ofcourse this is how your story reads - forgive me if I am wrong) If this is so the dealership sold somthing that was not theirs to sell. The contract was not completed. This is a three wasy deal. Yourt old vehicle plus the check for the porsche. If the check didn't go through then they can't have your vehicle. If you accepted the one they gave you then you are accepting the terms of a trade in swap. In which they give you one for the one they took from you.

One of your major actions should have been to retrieve your original vehicle from the dealership. They shoould havew never sold your car unless the deal went through. I'm ot just writing toi waste time. I've been in the auto industry fro over 20 years on all sides. While working for COAF I have personally gone after dealerships for this premptive move & have NEVER lost a case. What ends up happening is that the dealership ends up crediting you with the valuse of your vehicle or pulling your car back. As for why you were not approved...I have to see your contract & paperwork.

As for your attorney suing COAF, I'm sorry to say your case is so common that I can scripted the outcome. If what you say is true the courts after a long play out are going to tell you that the dealership was wrong & they should give you the money or your vehicle. This is done because the check does not read final draft, nor does you file show all needed docs. Then you will have to sue them because they don't want to be wrong. In the end the only thing COAF will have to deal with is your notice in report.com, which after this writing & a little common sense by a reader will only show thatCAOF is not at fault.
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#8 Consumer Comment

Capital one

AUTHOR: Chris - (U.S.A.)

I too got a loan through Capital One. I had no problems. Since it is a blank check loan, no amount is printed on the check. There is a maximum amount that you are approved for in your package.
I had to provide all income information to be approved and then the dealer had to provide the vehicle information and call a number to verify the check. Finally, they had to be listed as a lien holder and I had to send them proof of insurance.
Did you do this? There was no pre-approval for me, I was approved.
On a side note, I have tier one credit and they did offer the lowest rate.
Their payment coupon would come about a week before the payment was due. Now you can pay electronically.
Hope everything works out.
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#9 Consumer Comment

Kind of a Rip Off

AUTHOR: Cory - (U.S.A.)

All of those pre-approved checks say something to the affect "based on approval" or "pending approval" or something to that effect in the fine print. The only guaranted "check" is a sight draft from your bank which is a little different. Those other "pre-approved" checks are based on your credit card line and usually carry a very high interest rate.
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#10 Consumer Suggestion

If your credit is so good

AUTHOR: Chip - (U.S.A.)

why can't you fine another lender to fund the loan?

I got a blank check loan through Cap One with no problems at all; walked into a dealer and bought a brand new Jeep Cherokee.
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