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

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.

Comments

[tomedson2004]

12:25 PM on 10/20/2012

President Obama passed This Credit Card Act to help protect consumers from these unfair practices including charging unfair fees. If consumers are getting abused by unfair credit card practice a passed Debt Attorney can help!
This site is helpful http://nomorecreditcards.com

[vidian6]

04:08 PM on 05/26/2012

It's about time someone stepped up and did something, we pay these politicians to make sure that we aren't taken advantage of. While they spend most of their day shoveling money into their pockets, that they get from the people who they are supposed to protect us from.

[Alessandro Machi]

01:27 PM on 04/16/2012

I think the credit card payment protector plans may be one of the biggest consumer frauds ever perpetrated on the american public. Credit card companies charge for credit protection "insurance" but they are allowed to charge up to 99 times more than they pay out.

If Insurance companies offered programs that only returned 1% of what they collected in premiums, they would be sanctioned and fined, but for credit card companies, it's somehow legal??? www.credit-protector.blogspot.com

[Prapanna]

09:31 AM on 04/16/2012

Everyone should just stop paying their credit cards with these banks. Imagine if most everyone did so?

[WhoIsNoOne]

08:53 PM on 04/15/2012

They are just abiding by the bankocratic oath
"First, do no good"
or is it
The rule of gold "do unto others that which will
gain the most fee income"

[sf1000000]

08:52 PM on 04/15/2012

They say crime dosen't pay....the banks prove that it does all the time...

The Godfather said, " you can steal more money with a briefcase than you can with a gun"...

When is our Goverment going to start protecting us from these Preditors?...We are the goverment vote like your life depends on it because it does..

Let's hope other states follow suit..

[anonymous67]

02:46 PM on 04/15/2012

Organized crime has found banking to be much more profitable than loan sharking, protection rackets and selling drugs and they NEVER go to prison.

After FOUR years not a single executive has gone to prison for Wall Street's massive spree of fraud and perjury. And there is ABUNDANT evidence. San Francisco found over 85% of bank documents were fraudulent. A single register in Mass. found 31,000 fraudulent document in just his county. The evidence exists in courthouses across the country, however, if you REFUSE to look, then you won't find it.

America, our government is corrupt. And bankers are above our laws.

[Laxman2]

09:00 PM on 05/12/2012

Christ you've! Been using this garage since April!!! Media all over it anon. No facts just anger at Wall Street and Banks. Crimnal in every corner. Go to a ball game, get a beer and relax.

[tosc]

11:30 AM on 04/15/2012

why does the dam bank get to "settle" and pay a fraction of the profit they sneakily extracted from their customers? why are they not made to pay in "full" the amount the swindled? Banks have become the new enemy!

[fortressfountain]

10:55 AM on 04/15/2012

The banks have a lot of law suits so why is their stock going up? Is it speculation about more usury rate credit cards? Wow, I heard you get $500 in fees for every $1000 you borrow. If you do not pay you could end up in prison. So who will sign up for deals like this?
Bankers and execuives who plan these cards should be made to take them out.

[Flight]

10:27 PM on 04/14/2012

Surprise...BofA makes another list that has become so common now.

[unfoxworthy]

10:15 PM on 04/14/2012

Anyone had enough yet?

[tosc]

11:32 AM on 04/15/2012

I have and that is why I cut up my major credit cards that are affiliated with the banks listed above. I hold one credit card and it is from a Canadian Bank. Once I pay that off, I am done with credit cards! going back to cash!

[unfoxworthy]

12:02 PM on 04/15/2012

My hat's off to you!
I did it way back in the 90's. I thought BOA was out of control THEN!

[wikwox]

02:36 PM on 04/14/2012

Without constant scrutiny banks revert to thier deceptive selves and fees sprout aplenty. America seems at the mercy of these banks, BofA has a presence in my state and possibly yours and perhaps ownership of a politician or two. But its good to see states fighting bck, and hopefully winning.

[jistinnkees]

12:10 PM on 04/14/2012

Wow Hawaii, The youngest state looking out for its citizens.

[MPFIED]

11:46 AM on 04/14/2012

Rest assured that existing customers of these institutions will subsidize whatever payout each of these states will or have received.

Many of these banks risk models are built around the possibility of lawsuits and subsequent settlements. They put systems in place to merely spread that liability across their portfolio through other nebulous fees/charges. The cycle continues,unabated.

[Janzee12000]

08:27 PM on 04/14/2012

True.. My hopes are high (but not unrealistic) for this new consumer financial protection bureau. It certainly is not the 'end all' but possibly a vehicle to bring visibility to these malicious practices so individual states can act. IMO it's not much to ask these institutions to make money the 'ol' fashion way.., to earn it' instead of stealing it...

[ItsGettingWeird]

11:41 AM on 04/14/2012

Are any trolls out there willing to make the link between Obama and Hawaii's lawsuit against these banks? That would be fun to read.