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The credit card industry has taken a beating in recent years. Most of us know about the new regulations, but there have also been a series of lawsuits regarding so-called payment protection plans. Has your credit card provider been hit with such a lawsuit? Let’s take a look at a few of those that have.
In January of 2010, a class action lawsuit was filed against Capital One in the US District Court for the Southern District of California.
The lawsuit alleged that Capital One did not disclose the terms properly, had severe restrictions on the plan’s benefits and made it very difficult for consumers to get their benefits. Also, Capital One was accused of pushing this plan onto consumers via direct marketing or without their consent.
Capital one settled this lawsuit late in 2010 and consumers were offered $15 to $63 for their troubles. The amount given depended on the consumer’s dealings with the company.
Earlier this year, HSBC was hit with a payment protection plan lawsuit.
The lawsuit alleged that HSBC enrolled customers in the plan without notice. It also alleged that HSBC solicited retirees, the disabled and others who did not qualify for benefits under the plan. Like the Capital One lawsuit, HSBC was also accused of making it very difficult to realize any benefits under the plan. Additionally, HSBC was accused of making it difficult for customers to cancel the plan.
In December of 2010, a class action lawsuit was filed against Discover in Minnesota. A similar lawsuit was also filed in Tennessee during that month. The culprit in each case – you guessed it – was a payment protection plan.
Each lawsuit alleged deceptive business practices by Discover in regard to their payment protection plan. The Minnesota case claimed that consumers were tricked and did not even know that they signed up. It was estimated that Minnesota residents were charged tens of millions of dollars during this alleged scam.
As has been reported on this site, Chase was subject to a payment protection lawsuit. Customers were sent checks of $20 and were automatically enrolled in the plan if they cashed them.
It seems that the credit card industry has been riddled with cases of payment protection scams in recent years. It is a tell-tale sign of corruption within the industry.
However, this does not mean that all credit card companies are practicing such deceptive behavior. Your best bet is to review your statements regularly to ensure that you understand all of the charges on there.
If there is something that you do not understand, contact the company for an explanation and, if you feel that you are being ripped off, get it cancelled or consider switching credit card providers.
Oh, and if you get a check in the mail that you did not earn, chances are that there are strings attached. Don’t cash it until you’ve thoroughly investigated it!