CHARLESTON, W.Va. — Four large banking companies will pay West Virginia more than $7 million total. Bank of America, JP Morgan Chase, Citibank/Citigroup and GE Money Bank have agreed to settlements of $1.95 million each for violating West Virginia law.
According the complaint filed, the companies used “misleading” and “deceptive” tactics to enroll customers in payment protection programs that would cover minimum monthly payments for their credit cards in the event of a major life change, like loss of income, spouse or other such event.
If a new card holder even expressed “interest,” he or she was automatically enrolled in the protection programs without being given the change to review the terms and conditions. The fees were typically 89 cents per $100 credit card balance and brought in millions for the banks over a period of several years.
“Over a number of years, thousands of West Virginians entered into credit card payment protection programs without knowing they had done so, were charged extra fees and then had trouble reaping the benefits,” said Attorney General Patrick Morrisey in a statement.
“Our office is committed to ensuring businesses, no matter how large or small, do not take advantage of our citizens or violate the laws.”
Morrisey said the settlement money will help ensure the Consumer Protection Division has three years of operating revenue. Any additional money, once that requirement is met, will be returned to the Legislature.
Similar lawsuits are still pending against Discover Financial Services, HSBC Card Services and World Financial Network Bank.