A major issuer of credit cards to consumers with blemished credit has
agreed to
clean up its act. Direct Merchants Bank (also know as Metris Companies) is
settling lawsuits filed in Minnesota, Arizona, and California by agreeing that
all payments received by 5 p.m. Eastern time will be credited to the
cardholder’s account the same day. In addition, for two years, the company
will
agree to give refunds to customers who wish to cancel purchases of various
enhancement services, including credit protection, extended service plans and
membership clubs. The lawsuits were filed in 2000 and 2001 and alleged that
Direct Merchants Bank routinely assessed fees for the purchase of fee-based
services which cardholders did not authorize and repeatedly charged late
payment fees and interest for cardholder payments that were not in fact
late or
delayed. Under other terms of the settlement, Direct Merchants/Metris will pay
approximately $5.5 million for plaintiff attorneys’ fees. The agreement will
also enable former cardholders who apply and qualify for a new credit card to
pay no annual fee and receive a 9.9% APR for one year. Metris will also offer
to make a charitable contribution of $8 in their name or give them a choice of
a coupon book good for discounts on a variety of goods and services or
enrollment in a card registration or travel protection service. The agreement
will cover all current and former cardholders who were issued credit cards
from
January 1, 1995 through February 1, 2002. For more information visit
http://www.metriscompanies.com.
A major issuer of credit cards to consumers with blemished credit has
agreed to
clean up its act. Direct Merchants Bank (also know as Metris Companies) is
settling lawsuits filed in Minnesota, Arizona, and California by agreeing that
all payments received by 5 p.m. Eastern time will be credited to the
cardholder’s account the same day. In addition, for two years, the company
will
agree to give refunds to customers who wish to cancel purchases of various
enhancement services, including credit protection, extended service plans and
membership clubs. The lawsuits were filed in 2000 and 2001 and alleged that
Direct Merchants Bank routinely assessed fees for the purchase of fee-based
services which cardholders did not authorize and repeatedly charged late
payment fees and interest for cardholder payments that were not in fact
late or
delayed. Under other terms of the settlement, Direct Merchants/Metris will pay
approximately $5.5 million for plaintiff attorneys’ fees. The agreement will
also enable former cardholders who apply and qualify for a new credit card to
pay no annual fee and receive a 9.9% APR for one year. Metris will also offer
to make a charitable contribution of $8 in their name or give them a choice of
a coupon book good for discounts on a variety of goods and services or
enrollment in a card registration or travel protection service. The agreement
will cover all current and former cardholders who were issued credit cards
from
January 1, 1995 through February 1, 2002. For more information visit