Credit Card Holders Can Sue Banks
PHILADELPHIA (AP) _ A federal appeals court has ruled that consumers can sue banks over alleged ``bait and switch″ credit card plans that promise no annual fees but end up imposing them later.
The ruling by a three-judge panel of the 3rd U.S. Circuit Court of Appeals says card holders can sue under the Truth in Lending Act.
``Solicitation disclosures are intended to alert the consumer to the basic costs of the credit card he is considering _ a purpose unserved where the issuer conceals the temporary nature of a favorable fee or rate in this manner,″ U.S. Circuit Judge Anthony J. Scirica wrote in the decision issued Friday.
The decision reverses a ruling by U.S. District Judge Bruce W. Kauffman, who dismissed the lawsuit against Fleet Bank.
The lead plaintiff, Paula Rossman, said she responded to a Fleet solicitation for a credit card with no annual fee, but the company added a $35 annual fee six months later.
Fleet’s explanation was that the Federal Reserve Board had raised interest rates. But the lawsuit alleges that Fleet planned all along to impose a fee if interest rates rose.
Fleet’s lawyer, Burt M. Rublin, said the cardholder agreement clearly spelled out that Fleet reserved the right to change the terms at any time.