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Providian in Talks to Settle Consumer Lawsuits in Two States
Bloomberg News
June 30, 2000
Providian Financial Corp. is in talks to settle two lawsuits filed on behalf of up to 12 million consumers, which accuse the sixth-largest U.S. credit card issuer of deceptive business practices, lawyers said. Providian's $300 million agreement, the largest ever for the OCC, resolves federal and local charges that the company deceived credit-card holders about rates and fees.
The consumer suits pending in San Francisco and Philadelphia seek class-action status, and accuse Providian of practices that go beyond those covered by the settlements, said plaintiffs' attorney Kelly Dermody. The alleged practices include imposing unreasonable fees on credit-line increases, and charging exorbitant rates for credit insurance and other services automatically added to cardholders' bills."I think the government settlement sends the message it is possible, even from the company's perspective, that you can evaluate these practices on a wide scale," she said.