Attorney General's Office

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Jul 4, 2004 12:57 pm US/Eastern
(1010 WINS) (ALBANY) A major credit card company will pay restitution to tens of thousands of New Yorkers in the latest court case claiming fraudulent and deceptive tactics that put consumers in deep debt.

A state Supreme Court judge has ordered Cross Country Bank, based in Wilmington, Del., to stop acts including fraud, false advertising, deceptive business practices and abusive debt collection practices that included "rude, insulting, obscene and threatening statements," according to the civil court decision. Restitution and penalties are still being determined.

Tens of thousands of New Yorkers are expected to get some share of millions of dollars in payment from the firm, said Christine Pritchard, spokeswoman for state Attorney General Eliot Spitzer who brought the civil case in Albany. The decision was dated June 23 and released Friday.

"The fraudulent scheme by this credit card company is particularly egregious due to the vulnerability of the targeted individuals, consumers with past financial problems eager to receive a credit card and rebuild their credit record," Spitzer said.

Several other states have made similar claims against the firm. Among them are Minnesota, Texas, West Virginia, Florida, Wisconsin, New Hampshire and Pennsylvania.

A spokesman for the company, part of Applied Card Systems, said no one could speak about the decision Friday. Instead, she provided the company's June 24 response to the complaint filed in Pennsylvania that said Cross Country's practices were carefully developed in consultation with consumer law firms and that it has "extensive controls" in place to make sure employees comply with the law.

"Several attorneys general across the country appear to be working together in the public domain in an effort to destroy our reputation without any regard for the facts," the statement said. "It is a disgrace that a company's reputation can be smeared like this in a public forum without ever having the opportunity to present facts from both sides."

Last year, New Hampshire, Minnesota and New York filed lawsuits claiming that Cross Country Bank provided high-interest credit cards to consumers with poor credit histories and charged them high fees that used up much of their available credit line.

The firm's employees then harassed and used abusive language to collect on overdue accounts, the lawsuits contended.

Spitzer argued that Cross Country deceived consumers into applying for cards with credit lines up to $2,500. Most received credit of no more than $400, which was immediately applied to fees imposed by the bank.

Consumers with complaints about credit card offers can call Spitzer's office at 800-771-7755.

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