Credit Card Fraud

Modified on 2009/10/14 21:50 by admin
Credit cards are no longer a convenience for Americans; they have become a necessity. The ability to purchase goods or services and defer payment for 30 or more days accounts for the millions of credit card applications every year. Banks prey on young, unsuspecting consumers with promises of low interest charges and low minimum payments. But it rarely turns out that way. Make no mistake, banks are in the credit card business to make money. As a result, consumers often accuse credit companies of using deceptive and misleading practices to collect revenue.

Credit card fraud litigation is not uncommon. Consumers are constantly filing lawsuits against the nation's most powerful banks over accusations of unfair business practices. In 2000, FirstUSA, the credit-card unit of Bank One Corp., proposed a $40 million settlement in a class action lawsuit that alleged the company charged improper late fees and financing charges. Capital One was accused in 2001 of improperly charging cardholders late and over limit fees as well as fees for fee-based services which cardholders did not authorize.

Numerous class action lawsuits have involved alleged violations of the Federal Truth-in-Lending Act (TILA). TILA requires any lender to disclose the terms and costs of all loan plans, including annual percentage rates, payment due dates and terms, late payment fees, over limit fees, total finance charges, application fees and annual or one-time service fees. If the bank does not supply the cardholder with all information involving any fee, the credit company may be in violation of TILA.

Consumers should be aware of several tactics credit card companies may use to turn a profit:
  • Improper late and over limit fees.
  • The shortening of payment deadlines without a timely notice.
  • Payment due dates that fall on Sundays or holidays when the mail is not running.
  • An interest rate increase because of a late payment.
  • A fee for an unapproved fee-based service such as, "payment protection" or "fraud alerts."

It is estimated that credit card companies profit over $6 billion annually because of late fees and other miscellaneous charges the cardholder is often never alerted to. Fortunately, there are several ways to protect oneself from becoming the victim of credit card fraud. First time card holders should research the exact terms (interest rates, late fees and annual fees) of a credit card offer before applying. Reading the fine print will help the applicant avoid a great deal of hassle if payment questions later arise. One of the most important tips for credit card applicants is to "shop around." There are a number of credit card companies offering a number of services. Researching the bank and its history of credit card fraud litigation is also important.

Plaintiff attorneys are beginning to have a high rate of success with credit card fraud cases. In recent years, the number of class action lawsuits filed against the nation's top banks over credit card fraud has steadily increased. Consumers should consider hiring an attorney experienced in credit card fraud litigation if they feel they are the victims of deceptive and fraudulent business practices.

If you have been the victim of credit card fraud, it may be important to contact an attorney who can help you protect your legal rights. Please keep in mind that there may be time limits within which you must commence suit.

Attorneys associated with will evaluate your case free of charge. In addition, you will not pay any fees unless your attorney recovers money for you. Please click on the free Ask An Attorney button to take advantage of this valuable service.

See Also

  1. Consumer Fraud
  Name Size