Credit One Bank is facing a class action lawsuit filed by two customers who claim the credit card company illegally charges fees for making express payments online. This lawsuit was filed in a federal court in New York, and it raises concerns about how Credit One handles its payment processing and fees.
What is the Lawsuit About?
Two Credit One customers, Anthony Waldon from New York and Jason Goldstein from Florida, allege that they were charged fees for using the “express payment” option to pay their credit card bills online. They argue that this fee was unfairly applied, as the payments were processed by an automated system rather than a live person.
The Law on Payment Fees
According to the Truth in Lending Act (TILA), companies are not allowed to charge extra fees for payments made through mail, electronic, or telephone methods unless the payment service involves a live customer service representative. This means the service should credit the payment on the same day or the next business day if done after a set deadline. For it to be considered a service provided by a live person, the representative should be involved in-person, on the phone, or electronically.
| Key Legal Points | Explanation |
|---|---|
| Truth in Lending Act (TILA) | Prevents charging extra fees unless a live representative handles the payment |
| Expedited Service | Credits payment the same day or next business day |
| Live Representative Requirement | Must be in-person, on the phone, or electronically, not automated |
What Credit One is Accused of Doing
Waldon and Goldstein claim that Credit One’s online express payment system is fully automated, without any real interaction with a live person. The lawsuit points out that even though Credit One claims a live representative handles express payments, the only interaction customers get is with something like a chatbot, not a real person. This automated system also fails to inform customers about cheaper payment options.
How Much Did Credit One Earn?
The fee for using the express payment option is $9.95 per transaction. Waldon and Goldstein believe that Credit One has earned more than $5 million from charging these fees to customers. Many customers use the express payment option to avoid late fees, but they end up paying more because of the express payment fees.
Why Are the Fees Problematic?
The lawsuit claims that Credit One’s actions are unfair because they take advantage of customers who do not fully understand the risks or costs of using the express payment option. The lawsuit also argues that customers trust Credit One to act in their best interest, but the company does not.
| Issue | Details |
|---|---|
| Express Payment Fee | $9.95 per transaction |
| Total Earnings from Fees | Over $5 million |
| Customer Reliance | Customers use express payments to avoid late fees, unaware of cheaper options |
Legal Accusations Against Credit One
The lawsuit accuses Credit One of violating several consumer protection laws, including New York state business law, the Florida Deceptive and Unfair Trade Practices Act, and the federal Truth in Lending Act. The plaintiffs also claim that Credit One has unjustly enriched itself by making money at the expense of its customers.
What the Plaintiffs Want
Waldon and Goldstein are asking the court to recognize their case as a class action lawsuit, which would allow them to represent all Credit One customers in New York and Florida who were charged express payment fees for online payments.
Conclusion
The lawsuit against Credit One raises important questions about how payment fees are charged and whether they are fair. It highlights the need for companies to be transparent with their customers about fees and payment options. As this case progresses, it may lead to significant changes in how companies handle online payments and fees.
FAQ’s
What is the express payment fee charged by Credit One?
Credit One charges a $9.95 fee for using their express payment option online. This fee is applied when customers choose to pay their credit card bills quickly through an automated system.
Why is Credit One being sued?
Credit One is being sued because customers allege that the express payment fee is illegal. They argue that the payments are processed automatically, not by a live representative, which violates the Truth in Lending Act.
How much money did Credit One allegedly earn from these fees?
According to the lawsuit, Credit One has earned over $5 million by charging these express payment fees to its customers.