Capital One’s Outage Totally Screwed Over the Working Class
For Americans working from paycheck-to-paycheck, a technical glitch to services can be dire
Last week’s Capital One outage shows how easily people’s lives can be upended by a single technical glitch: Countless transactions failed to complete, debit cards ceased to work, and panicked customers across the country — like myself — logged in to see absolutely no funds listed in their accounts. System glitches to direct deposits proved especially devastating, with outages landing on the first of the month — the day rent is due for the majority of Americans.
Fearing our precious money had simply vanished, people vented on Twitter with anger and panic. It didn’t help that Capital One didn’t send any alerts or emails about the outage until after the complaints started pouring in. Later, the company issued a half-hearted apology, saying they were sorry for the “inconvenience.” Because Capital One’s phone lines were so jammed, only a few customers were able to get through; those lucky few were then informed that there was no ETA for retrieving their funds.
Capital One was able to resolve the issue before the day was up, but the damage was done. Amid a sea of news outlets exploiting the crisis and unsympathetic trolls mocking Capital One customers for their strapped finances, hundreds of customers swore to close their accounts, or did so as soon as the issue was resolved. A damning portrait of working-class America emerged: one that is ill-equipped to go without even one paycheck.
People’s desperation should come as no surprise. About 78% of working Americans live paycheck to paycheck. And according to a 2017 CareerBuilder survey, these workers aren’t necessarily minimum wage workers: About 28% of those living paycheck to paycheck are making $50,000 to $99,999 per year.
Many of these people lack financial literacy or good savings habits, but 70% of them also have debt that eats up their spare income, according to the survey. Even among those making six figures, one in 10 are also living paycheck to paycheck. Boomers face staggering medical costs, while Gen X and millennials crumble under crushing student loan debt and child care costs. And the cost of living is skyrocketing.
Americans simply aren’t making enough, and that’s a problem no matter whom you bank with.
Capital One seemed to have little concept of how much a missed paycheck would affect their customers. There was little urgency to their public response, and they passed it off as an “inconvenience.” The company’s reaction sends the message that they believe landlords and billers would be understanding, or surely, their customers all had cash in their mattresses for a rainy day.
While I was affected by the Capital One outage, I had enough money in other accounts to handle my bills. Yet only a couple of years ago, not receiving a $1,000 paycheck would have been the difference between paying my rent on time and facing hundreds of dollars in late fees. When you’re poor, life’s little “inconveniences” get expensive.
Too many people assume that it’s simply a matter of cutting your morning lattes or canceling Netflix to break the paycheck-to-paycheck cycle.
It’s worth noting that I’ve had private landlords who were willing to work with me when I wasn’t able to make rent, despite ostensibly needing the money more than big businesses. Yet without fail, the property management companies I leased with charged me more fees and refused to waver on them. “Corporate sets those fees,” they’d say with a shrug. Those people on Twitter wondering why Capital One customers couldn’t just “explain to their landlord” have no idea of the delicate line that many workers walk with their finances.
I split my money into multiple accounts a couple of years ago, but my Capital One 360 account has been my primary bank account for more than 10 years, since they were ING Direct. I’ve always appreciated Capital One’s ability to detect fraud and protect my money. They even helped me fight a malicious timeshare company that placed an unauthorized charge on my card.
Yet when I saw the panic online, combined with Capital One’s glib response, I didn’t feel good about being a loyal customer. I felt terrible for the Americans who were thrown into despair, wondering how they would recover from the late fees. When you’re living paycheck to paycheck, even a meager late fee can throw off your budget. And let’s face it, late fees are rarely meager. I’ve been in a lease where the late fee was $200 — and $100 per additional day that the rent was late.
Too many people assume that it’s simply a matter of cutting your morning lattes or canceling Netflix to break the paycheck-to-paycheck cycle. The truth is much more difficult to grapple with.
When Capital One went down and people didn’t get the money they expected, we got a look at the true state of the working class in America. The middle class has shrunk, and it’s now the workers and the wealthy. Capital One’s outage threw this disparity into painful relief: We are struggling to get by, while the Capital One CEO is worth $1.1 billion. The missed November paychecks ruined the day for countless hardworking Americans, while Capital One’s stock rose.