Posted on 04/06/2009 10:38:40 AM PDT by TenthAmendmentChampion
Below are summaries of class action lawsuits filed against major credit card banks. This is not a complete list, just a few samples.
First USA (which became BankOne which 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.)
First USA once failed to send out monthly statements to many of its customers which, in turn, caused 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.
Chase -- If you have a card issued by Chase, perhaps you noticed a ten cent rebate on on of your monthly statements several years ago. That generous refund was the result of a class action lawsuit filed against Chase for dubious billing practices (not posting your payment on the date received as required by federal law). You only got ten cents because the lawyers who filed the class action suit took a big chunk of the $22 million settlement as their fee. There was so little left that everyone got just ten cents. (Most class action lawsuits against credit card companies result in a windfall for the attorneys with very little left over for consumers.)
Providian -- The king of unscrupulous billing practices and immoral behavior, Providian is considered to be the baddest of the bad credit card companies. It got caught overbilling its 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 (e.g., credit insurance). Many visitors to this website reported that they received checks from the California Attorney General for as much as $200.00 as a refund for Providian's billing overcharges. Providian was also signing up its customers for credit insurance without their permission.
Home l Credit l Debt l Bankruptcy l Site map 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.
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 late one month. Actually, Capital One received it just 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%. (Of course, 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.
MBNA -- Paid an $8 million settlement for improperly assessing late fees.
The above is by no means a complete list of lawsuits. As several banking regulators have stated publicly, "most credit card companies use sneaky tactics, but only a few are singled out for punishment."
Care to share your stories? I'll post mine too.
First Bank offered a number of spiffs to their “good” customers in exchange for several sequential months of prompt payments. The spiff I chose was a percent off the interest rate. They never reduced the interest, ever.
BankOne used to debit your checking account before crediting deposits, even if the deposit took place before the check hit. My husband caught them doing it and they punished him by reporting him to the bad check agency, which is much worse than a hit on your credit report. You can be locked out of new checking accounts for up to seven years!
We finally went to our local credit union and had no further problems.
We’re in the danger zone here people. Credit cards are a good thing and don’t forget it. Where else can you spend thousands of dollars and only pay back $45 a month? No one else.
The people who want to punish credit cards want more and more people dependant on govt programs and everyone knows this.
That’s what I did when Chase pulled the “changed due date” on my account. I paid that sucker off that same month and cancelled the card. I still get begging letters from them offering me all kinds of benefits if I will re-up. Screw them.
Go to your local credit union of USAA and get a new visa or mastercard. The credit unions are much more responsive to customers and you get the same access.
Better still..tighten your belt and use only debit cards or cash. Ask for cash discount from merchants(against their agreements, but today they will do it).
First USA depositing payments but not crediting the account until 4-5 business days later to be sure that it is past the due date.
This is the only CC I have but the remarks made to me were outragous to say the least. Im done.
I’m headed to the credit union later this week and will transfer all my money from them.
Good post - now, the “begats”:
Providian became Wamu, which is now Chase. Chase is famous for ratejacking. Capital One will ultimately sue everyone who goes to collection. Beware the default judgment.
PS. Sears and Key are serviced by Citibank
This is one of the LEGITIMATE functions of a government: To keep predatory businesses from abusing citizens and violating contracts!
In other words, to keep the playing field as level as possible.
Imagine that—the credit card companies doing something dishonest???? I’m shocked, shocked I tell you! (do I really need a sarcasm tag here?)
This kind of crap doesn’t happen when you use cash :P
Bank of America and First Bank were also good at putting the date due on their statements consistently on a Sunday. Before Internet payments you’d be late unless you paid by phone ($10 fee) or mailed the check on Tuesday.
A class action lawsuit is probably the most proper way to handle such a thing, though it could take years or at least many many months to settle out.
Once, I took a cash advance from Fleet Bank at 9.5% and when it arrived, my statement showed a 10.7% interest rate. When I called and asked why, the gal whom I dealt with over the phone (and yes, I got her name and tel extension) had been either terminated or reassigned.
I got the names and wrote very polite and accomodating letters to the CEO and chief corporate attorney enclosing in fat manila envelopes “as a courtesy” copies of the five complaint letters I had written 1: to the US Postmaster (for mail fraud) and 2: to the Investigations Section of the Boston branch of the Federal Reserve Bank and 3: to the State Banking Examiner for Massachusetts, 4: to the Better Business Bureau of Boston, and 5: to the Mass. Dep’t of Consumer Affairs, #4 and #5 for “bait and switch”; as well as a copy of both the offer and my filled-in acceptance form for the cash advance. I never sent any of the 5 complaint letters but I was certainly prepared to.
I spent about $5 for Xeroxing and postage and materials, and undoubtedly a couple of hours of word processing composure time but my rate changed back to 9.5% on the next statement.
I use just one credit card (mainly so I can easily see where all my money goes) and pay in full each month.
My BOA card did that to me. Upped my due date by 6 days after it was the 14th of the month for 18 years. I have a 799 credit score and have never been late with a bill.. They hit me up with a $30 late fee which they took off after I complained about it.
If it is an old account pay off the balance but don't close it. Those old accounts really help your credit score. A new account will hurt your score.
Do you know what cc companies call customers who pay off their bill each month?
DEADBEATS.
No kidding.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.