The FDIC announced a settlement with a credit card lender regarding its overlimit fee practices. The FDIC alleged the practices violated Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive trade practices. According to the FDIC, the lender assessed cardholders who had exceeded their credit limit during two billing cycles an overlimit fee during the first cycle and again on the first day of the second billing cycle without providing proper notice of this billing procedure. Under the terms of the settlement, the lender agreed to a civil penalty of $140,000 and restitution totaling $10 million to 283,000 credit card holders. Click here for a copy of the consent order containing the terms of the settlement.
Alert February 09, 2010