Class Action Lawsuits Filed Against Credit Card Companies
Below are summaries of class action lawsuits filed against major credit card banks. This is not a complete list, just a few samples. Some of the companies below have since been bought and sold by other big financial institutions so that their names have been changed or they no longer exist.
Bank of America -- In 2011, Bank of America settled a class action lawsuit for $410 million for debit card abusive practices. Bank of America was automatically opting in its customers for overdraft protection and not telling them when they spent more than what was in their accounts, charging them huge overdraft fees on tiny purchases. Some consumers racked up hundreds in overdraft fees on purchases of less than $10. It is important to note that Bank of America was not the only bank doing this -- almost all of them were doing this, which is why the federal government passed legislation regulating overdraft fees.
Capital One -- In 2010, a class action lawsuit was filed against Capital One and United Recovery Systems, a debt collection agency, for deceptive debt collection practices that violate the Fair Debt Collection Practices Act. The lawsuit alleges that Capital One and United Recovery Systems conspired to trick customers in to calling a toll free number signing up for a no interest debt pay back plan. Customers, whose accounts were delinquent, received a letter with the Capital One logo on it, but when they called the toll free number listed on the letter, they were unknowingly rerouted to the debt collection agency, United Recovery Systems and never informed that they were talking to professional debt collectors. The law firm who filed this class action lawsuit, Lemberg & Associates, alleges that tricking customers in to talking to debt collectors without their knowledge is a violation of the FDCPA. This same law firm, Lemberg & Associates, filed a lawsuit against Capital One in 2009 for other alleged violations of the FDCPA. As of May 2012, both lawsuits are still pending. JP Morgan Chase -- A class action lawsuit was filed in July 2009 alleging that in the years 2008 and 2009 JP Morgan Chase lured new customers in with the offer to transfer their high interest rate credit card balances from other credit card companies to Chase with the promise of a much lower interest rate credit card. After customers took Chase up on their offer and transferred their balances, Chase significantly changed the terms and conditions on many of its customers. The petition that started this class action lawsuit states: "Plaintiffs and hundreds of thousands of other consumers accepted Chase Bank’s offer to transfer the balances on loans held by other lenders to their Chase credit card accounts. In return, Chase consolidated the debt into a fixed, long term loan, the material terms of which would apply until the balance is paid off or the customer defaulted. Having obtained cardholders’ business with the offer of a long term loan, and having retained the consideration provided in exchange for that loan, Chase is now coercing Plaintiffs and Class members out of those loans by increasing the minimum monthly payment from 2% of the loan balance to 5% of the loan balance. (By way of example, someone carrying a $20,000 balance on a long term fixed rate loan will see her required minimum monthly payment increase from $400 to $1000.) Borrowers now faced with a payment that is 2.5 times the original minimum monthly payment are forced to attempt to honor the new terms Chase unilaterally imposed on them; agree to new, more onerous terms with Chase or another lender; or default and thus trigger onerous default APRs and late fees. Chase also unilaterally imposed a $10 monthly charge on , which it has apparently refunded in response to this litigation. In short, Chase is using its superior position to breach its contracts and unlawfully deprive Plaintiffs and Class members of their long term loans, the terms of which are more favorable to Plaintiffs than to Chase." (Source: GirardGibbs.com, the law firm that filed the class action suit) As of May 2012, this lawsuit is still pending. First USA -- A class action lawsuit was filed against First USA when it changed the due date associated with monthly credit card payments 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. (Note: First USA changed its name to BankOne which was eventually purchased by JP Morgan Chase) The practice of arbitrarily changing a due date has been banned by federal legislation passed in 2009, the Card Act.
Class Action Lawsuits Against Major Credit Card Issuers