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Case ID: 4895 | Credit / Debt | 08/10/2006
Chevy Chase Bank has settled a seven-year-old class-action lawsuit that could affect hundreds of thousands of credit card holders who say they were charged late fees and excessive interest rates that were not part of their agreements with the bank.
The bank agreed to pay $16.1 million and repair any damages to customers' credit history. A court-appointed firm must now try to locate the customers, many of whom have moved since the problems surfaced more than 10 years ago, according to the settlement in Baltimore City Circuit Court. The case involved Visa and MasterCard deals advertised by Chevy Chase in 1996 that promised an interest-rate ceiling of 24 percent, according to the plaintiffs' attorneys. About 1 million customers, many of whom already had credit problems, applied for the card, but some complained that their rates spiked to 30 percent. The plaintiffs also charged that the bank imposed higher fees for late payments or for going over a credit limit than were part of the initial agreement. "The energy from actual consumers about his case was remarkable from a very early stage," said a staff attorney with District-based Trial Lawyers for Public Justice, the group that represented the plaintiffs. He said some customers are still having problems buying a car or house, and that others still complain of being hassled by debt collectors. Payments to some consumers could be in the thousands of dollars, an attorney estimated. About a quarter of the $16 million settlement will go to attorney's fees, and another $1 million is likely to go toward the cost of locating those affected by the charges. The firm in charge of locating the customers will have access to Chevy Chase Bank records, but it is up to customers to contact Poorman-Douglas Corp., the court-appointed settlement administrator. Bland said the group would be setting up a toll-free number and a Web site, but he did not have details. Those who have a claim have 90 days to get in touch with the administrator. "There's a good chance for the consumer that even though they could get refunds, we won't be able to get to them after all these years," an attorney handling the case said. Any money not distributed to plaintiffs will go to nonprofit groups chosen by the plaintiffs' lawyers and Chevy Chase. "There's so many barriers to getting the relief to customers," said a staff attorney with the National Consumer Law Center, based in Boston, which was an adviser on the case. "The fact that these cardholders are getting any sort of cash in their pockets for this is pretty good." The lawsuit settles a 7 year lawsuit alleging cardholders were charged late fees and excessive interest rates. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Credit / Debt Cases of Interest A class action lawsuit has been filed on behalf of uninsured patients who received and were billed for medical care by any hospital within the South Dakota based Avera Health network of hospitals. The suit contends that Avera billed its uninsured patients at rates far in excess of the rates employed for insured patients and that this practice was and is both discriminatory and illegal. A national class action has been filed in Pennsylvania against FleetBoston Financial Corporation, who operate under the name Fleet Credit Card Services. The action is brought on behalf of all U.S. residents who, since February 2002, have had unauthorized credit report inquiries made by FleetBoston. The action is brought under the federal Fair Credit Reporting Act and seeks actual, statutory
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A class action lawsuit has been filed against AT&T Wireless Services, Inc. on behalf of wireless phone subscribers who requested termination of their wireless accounts and were then improperly charged an "adjustment" or other fees for services after the effective date of the termination. The suit seeks actual damages, as well as statutory and punitive damages, on behalf of the plaintiffs. Florida's laws protect consumers from businesses that would otherwise harm them. The parties have reached a tentative $6.9 million settlement in an action filed against automobile retailer AutoNation, Inc. on behalf of Floridians who allege that, from August 6, 1995, through October 31, 2000, the company failed to deliver correctly signed retail installment contracts in connection with the sale of new and used motor vehicles in violation of Florida's Motor Vehicle Retail Sales Finance and Deceptive and Unfair Trade Practices Acts. To recover under the settlement, you must submit a claim form no later than July 29, 2003.
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