First Premier Bank

Albany, NY: (Aug-15-07) Attorney General Andrew Cuomo's office brought charges against South Dakota-based First Premier Bank, alleging that it used illegal and deceptive marketing and lending practices to lure in people with questionable or nonexistent credit records. The lawsuit began after several people filed complaints with the state, alleging that they were promised modest lines of credit as opportunities to establish or boost credit ratings and gain access to consumer services that require a credit card. But the cards were so bogged down by high interest rates and hidden processing fees, that people ended up with credit limits of less than $100 or, in some cases, no credit at all.

The suit claimed that First Premier, which has more than 3.7 million card carriers around the country would entice consumers by claiming they had been pre-approved for up to $2,000 in credit, with interest fixed at 9.9%. The company also promised to not levy processing fees on the cards. Further, most applicants were given a $250 credit line, brought down to about $70 after a $178 processing fee was charged. The 9.9% interest rate could more than double without notice. Additionally, the company levied annual and late fees and charged customers to access their accounts online. In a settlement reached, the credit card company agreed to a $4.5 million settlement to resolve the lawsuit. [POUGHKEEPSIE JOURNAL: CREDIT CARD MARKETING]

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Published on Aug-16-07