Payment Protection Plans

Fraud can take all kinds of forms in the credit card industry.

One deceptive practice exposed by Baron & Budd attorneys involves companies promoting so-called payment protection plans to their existing customers.

Most often sold over the phone, and with carefully crafted pitches intended to confuse and pressure the consumer, such programs may at first glance appear to offer important coverage. Given the possibility of unemployment or disability, for instance, who wouldn’t want to be protected from mounting late fees and finance charges?

However, these plans are in fact of little value to enrollees, many of whom are elderly or unemployed. Responding to an aggressive and confusing sales pitch, many enrollees are not even sure how the plan actually works and therefore never receive any benefits. Some enrollees may not have even agreed to the plan but are charged anyway by the credit card company, which has the existing data to add a monthly amount to their existing clients’ accounts.

Payment protection plans are a boost to the credit card companies’ bottom line but they are wrong and they abuse consumer trust.

That’s why Baron & Budd represented three states in their fight against these deceptive credit card practices, garnering a total of $27 million after lengthy and difficult negotiations against various defendants, including:

  • Bank of America Corporation
  • Barclays Bank Delaware
  • Capital One Bank (USA) N.A.
  • Chase Bank USA, N.A.
  • Citibank
  • Discover Financial Services, Inc.
  • GE Money Bank
  • HSBC Bank USA, N.A.
  • JPMorgan Chase & Co.
  • World Financial Network National Bank

With Baron & Budd’s continued representation of Public Entities in the area of deceptive trade practices concerning so-called payment protection plans, we, and the states we represent, are sending a strong message to credit card companies that this type of deception will not be tolerated.