Capital One Reaches Agreement With Influencers Who Claim the Company Hijacked Their Commissions

Capital One has agreed to settle a class action lawsuit filed by online influencers who claimed the company’s browser extension improperly withheld their sales commissions.

The case highlights a warning for other credit card issuers about the risks of how they design and manage technology tools that interact with participants in the eCommerce ecosystem.

Plaintiffs allege that Capital One’s browser extension, Capital One Shopping, can replace an influencer’s tracking cookie with its own, allowing the bank to claim referral credit and associated sales commissions, according to American Banker.

The lawsuit says approximately 10 million people use Capital One Shopping.

Capital One, the largest U.S. credit card issuer following its acquisition of Discover earlier this year, has not admitted to any wrongdoing.

The bank tried to have the case dismissed, but a Virginia judge ruled that social media creators had plausibly claimed Capital One either knew — or should have known — that its browser extension was rerouting commissions by overriding cookies or other tracking codes, according to Reuters.

Capital One issued a statement indicating otherwise.

“Capital One Shopping does not replace affiliate marketer cookies or unlawfully take credit for commissions,” the company said. “We disagree with the allegations in the complaint and look forward to defending ourselves in court.”

The parties are still negotiating the settlement and they have not revealed whether Capital One will make any payments.

But they have reached an agreement in principle to settle the suit, according to American Banker, and informed a Virginia court that negotiations will continue in the coming weeks.

PayPal has faced similar accusations to those directed at Capital One. According to reports, an online content creator claims that PayPal’s browser extension, Honey, can divert commissions away from influencers.

Credit card issuers that become targets of lawsuits like the ones recently involving Capital One or PayPal may be forced to tap their cash reserves to settle with plaintiffs.

They also risk reputational harm when accused by outside parties of theft or other misconduct.

The number of people using PayPal’s Chrome extension has fallen after a lawsuit claimed the tool takes commissions from social media influencers.

Consumers who hear about the lawsuit influencers filed against Capital One may think twice about using the company’s browser extension — and may even hesitate to use its other products in the future.

PayPal faced similar fallout with Honey. The browser extension once had more than 20 million Chrome users, but that was before a lawsuit surfaced alleging misconduct.

A recent report shows Honey’s user base has since dropped to 14 million users.

To reduce legal risk and the financial damage that can follow, credit card issuers that offer digital tools should regularly audit those products to ensure they’re working properly. They should also be transparent about how tools like browser extensions operate and disclose that information clearly to users.