SEATTLE -- Attorney General Rob McKenna today announced a settlement with Cross Country Bank and Applied Card Systems that concludes an investigation into alleged deceptive credit practices.
"Cross Country Bank, which issued credit cards, and Applied Card Systems, which performed collections work, used telemarketing and Internet advertisements to market credit cards that promised to help consumers repair their credit," McKenna alleged. "Instead, they failed to disclose fees and issued minimal credit limits so that many customers soon found themselves in default. The companies then engaged in unfair or abusive collection practices."
The Attorney General's Office received 300 complaints against Pennsylvania-based Cross Country Bank between 2000 and 2003, prompting the investigation.
Most complaints were resolved through the office's mediation process and investigators believe the company has since ceased the objectionable practices, McKenna said.
Under the settlement, the respondents are required to provide restitution of fees collected from customers who opened accounts after Dec. 31, 2001, and who filed substantiated complaints. They must also request removal of adverse credit reports.
The settlement prohibits the companies from engaging in a number of actions. They may not fail to disclose all fees and terms, fail to disclose a caller's identity, make repeated phone calls on the same day, otherwise harass or abuse customers, falsely inform customers that respondents are not allowed to close an account, or promote that credit card accounts opened with the company are useful in building or improving credit.
The companies will pay Washington $30,000 in attorney fees and costs.
The settlement does not represent an admission of wrongdoing or liability by the respondents.
The states of Pennsylvania and Florida previously entered into similar settlements with Cross Country Bank and Allied Card Systems.
Kristin Alexander, (206) 464-6432, KristinA1@atg.wa.gov
Note: The settlement applies only to residents of Washington State. Residents of other states who have concerns about Cross Country Bank should contact the Attorney General’s Office in their state.