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 as slamming
• 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 been implicated:

• American Express
• Bank of America
• Chase
• Citibank
• Discover
• HSBC
• Wells Fargo
• Capital One
• General Electric
• Barclays
• First Premier
• Wachovia

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.