Federal officials have filed a $200 million dollar lawsuit against an Atlanta credit card marketing firm, accusing it of deceptive practices.
The Federal Trade Commission and Federal Deposit Insurance Corporation on Tuesday filed lawsuits against Atlanta-based CompuCredit, and two out-of-state banks.
The feds say the companies, "misled" borrowers several times over a two-year period.
They allege that, in some cases, two thirds of a $300 dollar credit limit on the unsecured cards was eaten up by hidden fees.
Columbus Banking and Trust markets the cards, and were also named in the lawsuit. But rather than go to court, they agreed to pay ten million dollars in fines and restitution.
CB&T CEO Steve Melton says borrowers who took out the cards knew what they were getting into:
“...Well, they haven't been bamboozled by the small print, and the people who take these cards have been denied – and we wouldn't have issued these customers a card in the normal course of our business.”
Melton says borrowers knew what they were getting into:
“I don't want anyone to think that this market segment is a bunch of ignorant people that don't know what they're doing when they get a credit card. That's not the case.”The feds are seeking $217 million dollars in fines and restitution from CompuCredit, and the other two banks, Wilmington-based First Bank of Delaware and First Bank & Trust of Brookings, South Dakota.
The firms deny the charges and say they'll fight the lawsuit.
FTC officials did not respond to repeated requests for comment.
If you have a credit card that bears the name of any of the following companies, or your are a CompuCredit customer, you may be eligible to receive damages: Aspen, Aspire, Aspire A Mas, Emerge, Fingerhut Credit Advantage, FreedomCard, Imagine, Majestic and Tribute.
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