If you own a credit card, chances are that you’ve heard about payment
protection programs. These programs are marketed to consumers as a way
to protect them and offer them peace of mind when catastrophe strikes,
such as losing a job, becoming disabled, or dying. This protection is
usually offered in several ways, including telemarketer phone calls, email
pitches, and mailers included in your statements.
A growing number of credit card customers are learning of the deceptive
use of payment protection programs to boost credit card company revenue
at the expense of consumers, including the elderly, the disabled, the
retired, the seasonally employed or the self-employed.
While these protection programs seem like a good idea for the consumer,
what the credit card company isn’t telling you is that they have
been making fat profits off of these programs for years-and have done
so at the expense of the consumer. In fact, according to the Government
Accountability Office, the top nine largest issuers reported $1.3 billion
in profits from the fees they collected from debt protection programs.
Our nationally respected Philadelphia lawyers at Golomb & Honik, P.C.
have been actively litigating claims that credit card companies are employing
deceptive and unfair business practices to generate monthly fees from
so-called payment protection plans. To date, our lawyers have recovered
nearly $200 million for consumers in settlements with credit card companies
due to abuses associated with payment protection coverage.
Payment Protection Plans Defined
Payment protection plans-also referred to as debt suspension, debt security,
card security and account protector plans-are financial services offered
to cardholders by credit card companies and are marketed as means of deferring
minimum monthly payments should a life-changing event such as a disability
or unemployment occur. In exchange for debt suspension and corresponding
benefits, cardholders are assessed a monthly fee.
However, an increasing number of consumers allege that they either did
not consent to these programs or that they were ineligible for the benefits
offered by the program despite the fact that the credit card company regularly
charged the monthly service fee knowing of their ineligibility.
In many cases, credit card companies would even deny cardholder claims
for these benefits, despite the fact that they paid into the payment protection
program. The credit card companies would even refuse to refund the consumer’s money.
Deceptive Practices Used by Credit Card Companies
Among the devious methods used by credit card companies to sign up customers
for payment protection plans and collect the associated fees are:
- Denying cardholders benefits when the stipulated events are legitimately invoked
- Enrolling cardholders who do not qualify for program benefits according
to a credit card company's own rules
- Enrolling cardholders without proper authorization or consent, also known
- Failing to provide the full services of the program to approved customers
- Not informing cardholders of the monthly fees at the time of sign-up
Class Action Lawsuit Against Credit Card Companies
You may qualify to participate in a class action suit against your credit
card company if you were enrolled in one of the programs without your
consent or you enrolled in a payment protection program and were a senior
citizen, self-employed, employed part-time, a seasonal worker or had a
disability at the time of or during your participation in the program.
The class action lawsuit that is currently underway alleges that banks
and credit card companies engaged in deceptive and unfair business practices
through the administration, marketing, and advertising of these payment
protection plans. The lawsuit alleges breach of contract, breach of the
covenant of good faith and fair dealing, unconscionability, violations
of state consumer protection laws, and unjust enrichment.
Which banks and credit card companies are involved?
While any bank or credit card company could be involved in a deceptive
payment protection program scheme, the following companies have already
- American Express
- Bank of America
- Wells Fargo
- Capital One
- General Electric
- First Premier
Contact Golomb & Honik, P.C.
If you believe you have been the victim of wrongful payment protection
plan billing or other fraudulent financial services, please contact Golomb
& Honik, P.C. to schedule your
free case consultation. We represent clients in Pennsylvania, New Jersey, and nationwide.
Our experienced litigation lawyers have represented consumers across the
United States in their quest for justice. We believe in holding fraudulent
credit card companies responsible for their deceptive actions. To learn
more about your legal options or to schedule a free consultation call our
Philadelphia class action lawyers at (215) 278-4449.