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Hawaii Sues Bank Of America, Chase, Citi, Others For Deceptive Credit Card Marketing

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Brian Moynihan, President and CEO of Bank of America. Hawaii filed lawsuits against seven major banks and credit card companies, including Bank of America, Chase, and Barclays.
Brian Moynihan, President and CEO of Bank of America. Hawaii filed lawsuits against seven major banks and credit card companies, including Bank of America, Chase, and Barclays.

Fed up with credit card fees? So is the state of Hawaii.

The state of Hawaii filed a lawsuit against seven major banks and credit card companies on Thursday, claiming that the banks "slammed" Hawaii credit card customers, charging them for products customers didn't need and that the companies never provided.

The lawsuit names Bank of America, Chase, Citi, Barclays, Capital One, Discover, HSBC, and their subsidiaries as defendants.

The defendants used "predatory tactics to sign up customers for services they either don’t want or don't qualify for," and the companies charged their customers "without their knowledge or consent," according to a press release issued by the Hawaii attorney general's office.

Bank of America, Chase, Capital One, Discover, HSBC, and Barclays declined to comment on the lawsuit. Citi could not be reached for comment.

The state is asking for an injunction to stop these practices, restitution for customers and for the credit card companies to pay penalties. The companies would have to pay $500 to $10,000 in penalties per violation, according to the Honolulu Star-Advertiser. And the state estimates that 30,000 to 35,000 Hawaiians are victims of unnecessary credit card fees, according to KHON 2 News. A prosecutor offered an even higher estimate of 110,000 credit cards being charged unnecessary fees, according to the Associated Press.

"You don't know that you're enrolling, but they say, 'Oh you just enrolled,' okay, and now they've put a charge on your credit card," said David Louie, Hawaii's attorney general, of credit card companies' telemarketers, according to KHON 2 News. He said that the companies may have charged victims an average of $150 in the form of small charges, according to KITV 4 News.

Slamming lawsuits have been filed in other states. After West Virginia filed a lawsuit against Capital One for misleading credit card fees, the bank settled with the state for $3 million in January, according to the Boston Globe. Minnesota sued Discover in 2010 for tricking customers into buying optional products, according to The New York Times. Discover paid $2 million to settle the lawsuit in November, according to a press release.

West Virginia sued Discover in August for misleading credit card fees, Missouri is investigating Discover's marketing of its payment protection fee, and two class action lawsuits in California were filed against Discover in November and March, according to a regulatory filing by Discover.

Banks have stepped up their efforts to charge their customers more fees after the Dodd-Frank Act limited the amount of fees they could charge retailers per debit card transaction. Most infamously, Bank of America planned to charge its customers a $5 monthly fee for using their debit card, but it dropped those plans after a public outcry.

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