Cross Country Bank Ordered to Pay $8.9 Million in New York Fraud Case
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Cross
Country Bank Ordered to Pay $8.9 Million in New York Fraud Case
Cross Country Bank, a credit card lender targeting poor credit,
or "subprime", customers was ordered to pay almost
$9 million by a New York judge for deceptive, fraudulent and
illegal practices. Eight million dollars will be in fines, while
$900,000 will go toward refunds for New Yorkers who carried
the Cross Country Bank credit cards.
New
York Attorney General Eliot Spitzer filed a lawsuit in 2003
alleging that Cross Country Bank used deceptive credit card
solicitations to target consumers with poor credit records,
offering credit lines of up to $2,500 but giving the vast majority
of consumers only about $400 in credit -- most of which was
immediately applied to fees imposed by the bank, such as annual,
application and monthly maintenance fees.
As
part of his lawsuit, Spitzer also alleged that after driving
their cardholders into delinquency, Cross Country's affiliate,
Applied Credit Services, used abusive and illegal collection
techniques to harass cardholders into making a payment, including
repeated phone calls, calling cardholders at work, using insulting
and/or obscene language, and making improper threats. In addition,
Spitzer's office alleged that Applied Card Systems debited payments
from cardholders? accounts without authorization and misrepresented
payoff amounts.
Cross
Country Bank has changed its name to Applied Card Bank.
Published 01/26/06 (Modified 05/07/12)
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