I am very concerned over how Capital One Auto Financing is applying payments on my account. When I was paying my normal payment and principal payments, I noticed they were not adjusting my principal balance at all. I called and was told that I needed to send a separate payment to a different lockbox, so I did. Even after I did that, they still did not adjust my principal balance by the extra amount I was paying. Then the “principal payment" lockbox address was removed from their statements and was replaced with “Send inquiries and Payoff" section. I have called a few times in the last year, but now I am frustrated to the point I feel this should be investigated. What are they doing with the principal payments they are receiving? It looks like they aren't applying them so we continue to pay interest on money they have received. This would allow them to continue to collect interest on the full principal and not on the adjusted principal until the end of the term. I say this because the more I pay, the longer it says I can wait to make another payment when I want to pay it off faster.

I have been paying over my scheduled amount and they continue to extend the payment due date out but have not given me credit for paying down my principal payment, which in turn affects the interest being charged. My balance should be significantly less than what it shows on my statement, if they were doing this correctly.

I have requested in writing for them to go back and readjust my principal balance to reflect the actual amount owed, and that I would be reporting this unfair business practice as I have made principal payments (more than my scheduled payment) and even sent some of these payments to a separate lockbox for most of 2008. After I called and complained, the customer service person told me to send to a separate lockbox and now this lockbox no longer appears on their statement so I am not sure what they are doing about applying principal payments, but it is clear that they are not applying it to the actual principal balance or it would show a minimum reduction of the full principal payment, which my statements for the last 8 months do not!

I have sent Capital One a full accounting of all payments made in excess of my normal payment and due to their misallocation of payments, it shows i do not have a payment until June 2009. What it should show is that I owe less principal and am paying off my loan faster, which is of course why anyone pays over their minimal payment.