Parties in a putative class action alleging that defendant, a bank, mislead consumers and failed to properly apply customer payments to its credit cardholders have reached a settlement. Plaintiffs alleged that defendant misled consumers about the way in which it applied credit card payments to promotional purchases. According to plaintiffs, defendant engaged in deceptive and unfair business practices by marketing promotional reward card purchases as “interest free”, but charged California credit cardholders interest and fees for those purchases. Plaintiff filed suit on behalf of a class of California credit cardholders alleging violation of the California Business and Professions Code, fraud, and unjust enrichment, among other allegations. The parties engaged in mediation and emerged with a tentative settlement. The terms of the settlement provide for $5.5 million in cash benefits to plaintiffs. On June 2, 2014, plaintiffs will move the court for preliminary approval of a settlement between defendant and plaintiffs.
Alert April 29, 2014