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)