Recent Lawsuits Against Top Credit Card Companies
Providian Credit Card Civil Penalties and restitution order by Comptroller of the Currency and San Francisco District Attorney:
Excerpt from statement of Comptroller John D. Hawke Jr. June 28, 2000 Statement of Comptroller of the Currency John D. Hawke, Jr.
"For the past year, the Office of the Comptroller of the Currency and the San Francisco District Attorney's Office have been investigating complaints lodged by customers of Providian National Bank.
"We found that Providian Credit Card engaged in a variety of unfair and deceptive practices that enriched the bank while harming literally hundreds of thousands of its customers."
I am pleased to announce that we have entered into a consent order with the bank that ensures not only that these practices will come to an end, but that customers who were harmed will be compensated by Providian. The order provides that the bank will pay at least $300 million in restitution to its customers. When a bank engages in unfair or deceptive marketing practices, it damages its most precious asset -- the trust and confidence of its customers.
That relationship of trust and confidence is central to the bank’s safe and sound operation. We will not tolerate abuses that breach that trust through unfair and deceptive practices. Consumers should not have to become detectives to find out the true terms and conditions of their Providian Credit Card agreement.
Providian Credit Card should not discover after they receive their monthly statement that they have purchased a $156 credit protection policy that they neither want nor need. And if they are promised a promotional bonus for transferring credit balances, they should receive that bonus -- and not be told after the fact that the program requires a balance transfer of $10,000.
OCC Providian Credit Card Consent Order
Additional Private Litigation Against Providian Credit Card Results in $105 Million settlement:
Proposed Settlement Approved for Litigation Filed on Behalf of Providian Credit Card Holders
The settlement proposed for the Providian Financial class actions has been approved by the Court, and necessary follow-up procedures in related cases have taken place. The settlement therefore will proceed, and Class Members can expect that the settlement benefits will be distributed and credited in approximately July 2002.
After nearly 18 months of intensive discovery and motion work in the case, a proposed settlement was reached, which will allow for payments to certain Class Members, who are the present or former cardholders of Providian Credit Card. Under it, Providian Credit Card will pay $105 million (in cash and credit benefits) to class members to reimburse them for inappropriate fees and charges.
This supplements a settlement with government entities under which Providian has paid approximately $337 million to cardholders.
Under the settlements in the government and private class actions, Providian Credit Card also agreed to change certain business procedures and enforce processes to confirm that similar false charges and fees will not be incurred by card holders in the future.
|
