Have
lawsuits been filed against credit card companies for unfair and deceptive lending
practices? Below
are some lawsuits filed against major credit card companies and banks for breaking
Federal laws in order to try to "scam" their customers out of more money
unfairly. The below list is by no means a complete list of lawsuits filed against
major banks. As several banking regulators have stated publicly, "most all
credit card companies use sneaky tactics to get you to pay more, but only a few
are singled out for punishment." This
is not a complete list of credit card company lawsuits, just a few examples that
we thought you should know about. American
Express
A class action has been
filed against American Express Company and the American Express Centurion Bank
on behalf of AmEx cardholders, who allege that the company denies them the 20-day
grace period to make payments as stipulated in their agreements, and wrongly charges
them late fees and finance charges in violation of state consumer protection laws.
The action seeks restitution for all cardholders who have been paying charges
due to the company's fraudulent billing practices. The suit also alleges that
American Express intentionally delays mailing monthly billing statements to account
holders so that statements are not received until approximately one week after
the billing period closes. American Express does not consider a payment made until
it is received, rather than on the bill’s postmark date. This ensures that
account holders have even less time to get their payments in on time. These billing
practices result in the loss of any meaningful grace period, forcing account holders
to mail their payments almost immediately upon receipt of their billing statements,
in order to avoid a finance charge and/or a late fee. The lawsuit also claims
that American Express intentionally mails its billing statements in envelopes
without postmarks to hide its delayed billing practices, making it impossible
for cardholders to determine whether or not the delays are due to American Express
or the US Postal Service. Providian
The king of unscrupulous billing
practices and immoral behavior, Providian is considered to be the worst of the
worst. Providian got caught overbilling customers and had to pay the largest judgment
ever awarded against a credit card company, $300 million. They improperly assessed
late fees and charged customers for products never ordered. Providian was also
signing up and charging its customers for credit insurance without their authorization.
First
USA
First USA became BankOne
which then became Chase. A class action lawsuit was filed against First USA when
it changed the due date so that some customers, accustomed to paying by a certain
date each month, would be caught off guard. Many of them would send in their payments
late, not realizing that their due date was a few days earlier than they thought.
First USA charged customers $29 every time a payment was late. When two payments
were received late, they increased the interest rate 10 full points. First USA
has been accused of this practice more than once. Additionally, First USA once
failed to send out monthly statements to many of its customers whichcaused many
customers to pay late or not at all that month. When customers began complaining
about the $29.00 late fees assessed as a result, First USA claimed the mix up
was a result of a computer glitch; however, they refused to remove the $29.00
late fees and give up the millions in extra revenue. Instead, they announced that
they "had no duty to send out a statement each month" and it was just
too bad for their customers. Bank
of America
A $4.2 million dollar
settlement has been reached in the nationwide class action lawsuit filed on behalf
of credit card holders. The suit was filed in January 2001 in regards to "overlimit"
fees that were charged due to poor accounting methods. MBNA
Paid an $8 million settlement for
improperly assessing late fees. Another class action lawsuit has been filed against
MBNA Corporation, MBNA America Bank, N.A. and American Airlines on behalf of MBNA/TWA
Aviators Visa or MasterCard credit card holders. The suit alleges that following
the acquisition of TWA by American Airlines, cardholder's frequent flier points
were not transferred, despite the fact that they were told that the points that
they had received under the MBNA/TWA Aviators credit card would be posted to the
American Airline's AAdvantage Program. The suit further alleges that MBNA has
not provided a refund of the annual fees for the unused portion of the credit
card following the termination of the MBNA/TWA Aviators Program. Chevy
Chase Bank
A class action lawsuit
filed in 1999 alleged that Chevy Chase Bank charged higher interest rates on credit
cards than it had promised. The bank increased interest rates above 24 percent,
the maximum allowed under Maryland law. Chevy Chase Bank has agreed to pay about
$16 million dollars to thousands of cardholders. According to the Federal Deposit
Insurance Corp., Chevy Chase is Maryland's third-largest bank - by deposit share.
Advanta
Settled
a class action lawsuit by agreeing to pay $7.2 million to reimburse customers
who were guaranteed a low rate, but were charged a higher rate. First
Premier Bank
Albany, NY: (Aug-15-07)
Attorney General Andrew Cuomo's office brought charges against South Dakota-based
First Premier Bank, alleging that it used illegal and deceptive marketing and
lending practices to lure in people with questionable or nonexistent credit records.
The lawsuit began after several people filed complaints with the state, alleging
that they were promised modest lines of credit as opportunities to establish or
boost credit ratings and gain access to consumer services that require a credit
card. But the cards were so bogged down by high interest rates and hidden processing
fees, that people ended up with credit limits of less than $100 or, in some cases,
no credit at all. The suit claimed that First Premier, which has more than 3.7
million card carriers around the country would entice consumers by claiming they
had been pre-approved for up to $2,000 in credit, with interest fixed at 9.9%.
The company also promised to not levy processing fees on the cards. Further, most
applicants were given a $250 credit line, brought down to about $70 after a $178
processing fee was charged. The 9.9% interest rate could more than double without
notice. Additionally, the company levied annual and late fees and charged customers
to access their accounts online. In a settlement reached, the credit card company
agreed to a $4.5 million settlement to resolve the lawsuit. Sears
Paid $36 million to settle a lawsuit
filed by customers who claimed their interest rates were raised after Sears promised
it would not raise them. Capital
One
Several recent class action lawsuits
have been filed against Capital One and are still pending. This credit card company
once had a good reputation. It led the way in offering the first low interest
rate card on purchases, balance transfers and cash advances. It forced other issuers
to lower their rates, too. But then Capital One customers started complaining
that their payments, mailed in a full two weeks before they were due, were being
marked as having been received late. And Capital One was charging them late fees
and jacking up their interest rate as a result, which is why the lawsuits have
been filed. One case that received wide media exposure involved a man who had
emergency open heart surgery. Due to his illness, he mailed in his Capital One
payment one day late. When he called to explain what had happened, they coldly
told him "too bad" and jacked up his interest rate from about 7% to
21%. Capital One isn't alone in using this tactic -- Citibank, MBNA, Providian,
First USA do this as well. Citibank
Paid a $45 million settlement for
improperly assessing late fees. Citibank is one of the banks that will definitely
raise your interest rate to as high as 28% if any negative information appears
on your credit file -- even if you have always paid them as agreed. And they won't
change your rate back if you submit proof to them that the negative information
on your credit report was in error. Wells
Fargo & Co.
California residents
filed a class action lawsuit against the fifth largest bank in the United States
for allegedly charging excessive credit card processing fees to businesses. Wells
Fargo has agreed to a $34 million settlement to resolve allegations that 96,000
California businesses were overcharged. The
Home Depot Inc. and Lowe's Companies Inc.
A
$4 million settlement has been reached in the class action lawsuit filed on behalf
of customers with credit cards for the two home improvement chains, issued by
the Monogram Credit Card Bank of Georgia. The suit alleged that the companies'
misled customers in regards to promotions over the past four years that offered
interest deferred credit card purchases. | 
