Pennsylvania Attorney General Jerry Pappert filed a civil lawsuit against a Delaware-based bank and its Pennsylvania-based collection company yesterday, following claims that hundreds of consumers with impaired credit were targeted for pre-approved credit cards that were deceptively marketed.
The defendants are also accused of improperly disclosing charges and fees, and engaging in abusive and illegal debt collection tactics when cardholders defaulted on their accounts. The state’s investigation involved complaints from more than 400 consumers throughout Pennsylvania.
Pappert identified the defendants as Cross Country Bank Inc., Wilmington, DE, and Applied Card Systems Inc., Glen Mills, PA. The defendants are accused of violating Pennsylvania’s Consumer Protection Law and Fair Credit Extension Uniformity Act.
According to the suit, the defendants since 1999 have used direct mail solicitations and the Web site www.crosscountrybank.com to promote and market credit cards and services for consumers with impaired credit or lack of credit history. The defendants claim to have more than 3 million customers nationwide.
The ads promoting the pre-approved credit cards and services include claims that the cards carry a line of credit in the thousands of dollars to help consumers obtain the “positive credit history they deserve.” In reality, the credit limits are much lower than advertised and the cards include inadequately disclosed initial and monthly fees as well as other charges that have already been deducted from the minimal credit available, the suit states.
Pappert said the lawsuit also accuses the defendants of abusing, harassing, misleading and deceiving consumers through a variety of illegal debt collection practices.
The complaint was filed in Commonwealth Court in Philadelphia. Senior Deputy Attorney General John M. Abel of Pappert’s Bureau of Consumer Protection Office is handling the case.
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