Lawsuit filed by AG’s Office against financial institutions settled

CHARLESTON, W.Va. — A lawsuit alleging two financial institution’s credit card protection programs violated West Virginia law has been settled.

State Attorney General Patrick Morrisey Tuesday announced that Discover Financial Services and HSBC Finance Corporation will pay the state $1.95 million each (or $3.90 million total) as part of the settlement.

“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 Morrisey in a release. “Our Office is committed to ensuring businesses, no matter how large or small, do not take advantage of our citizens or violate the laws.”

The settlements come several months after the state Supreme Court of Appeals ruled in the case State ex rel. Discover Financial Services, Inc. vs. Neibert that the Office of the Attorney General had the authority to use special assistant attorneys general in certain cases. The two financial institutions involved in the lawsuit, and their subsidies, were parties in that case.

According to the complaint filed by Morrisey’s Office, the banks allegedly engaged in misleading and deceptive tactics to enroll customers in payment protection programs.

Those programs  involved fees of typically 89 cents per $100 credit card balance and all together collected millions of dollars for the banks over a period of several years.

“Our Office always will be aggressive in fighting back against companies that engage in schemes to mislead consumers or knowingly omit facts that would help consumers make the best decisions with their finances,” Morrisey said in the release.

Previously back in September, Morrisey’s Office settled with four other financial institutions in a separate lawsuit: Bank of America Corp., JP Morgan Chase & Co., Citibank/ Citigroup Inc., and GE Money Bank. The settlement was also $1.95 million each.

The money received from the settlement will be used to
help ensure the Consumer Protection Division has three years of operating revenue. The money left over will be returned to the Legislature.

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