Class Action Lawsuit Against The Credit Card Companies
Connie: Hello everyone!
This is Connie Brooks from Ask Mr. Credit Card.com
We’re here today to discuss one of the problems created by the current downturn in the economy.
Credit card companies have been unexpectedly lowering consumer’s credit limits.
For some people this is an embarrassing situation because they have their card denied while they are trying to make normal purchases.
Even worse than the embarrassment, is that having your limit lowered unexpectedly can seriously damage your credit rating.
We’ve had dozens of people write in to us saying that their limits were lowered without notice, and asking about the possibility of a class action lawsuit against the credit card corporations.
So, in response to your questions we’re here today talking with Mr. Samuel Deskin of the Deskin Law Firm.
Are you there Mr. Deskin?
Samuel: Hello Connie
Connie: Hi! Thank you for joining us today.
Samuel: Sure no problem
Connie: Before we get into the details can you tell us a little bit about what a class action lawsuit is?
Samuel: Sure. A class action lawsuit is basically a lawsuit but brought by a small group of individuals or one individual against a big corporation that has in some way either defrauded or harmed the individuals.
And so this individual or small group of individuals come and represent a larger group of plaintiffs, and so they act as class representatives to a big group of people who have been harmed.
In this way the courts can handle one case against a particular company versus handling hundreds or thousands or millions of individual cases against a particular company.
Connie: Well that makes sense to me. It definitely sounds like it might fit this situation too.
Samuel: Well it makes things a lot more efficient and when something like this happens it hurts everybody a little bit but not enough for them to make a federal case out of it. But with a class action, but with aggregating all the people you can make a federal case out of it.
Connie: Ok. Well now the situation that we’re having here is that people’s credit scores are being damaged because it is affecting their debt to credit ratio.
So say for example, somebody had a $10,000 credit limit and they charged $800 of it, and then the credit card company lowers their limit down to about $1000 unexpectedly – Well on their credit report it looks like they are utilizing nearly all of their available credit limit.
Since that’s about 30% of your credit score, it’s having a big impact on the consumers that it’s happening to.
Do you feel like this situation would warrant a class action lawsuit?
Samuel: Well, I guess the answer is, it depends. There are a lot of factors that go into a class action. I guess I’ll speak a little bit to that.
The first factor that you really have to look at are the number of people that are harmed. So, if this is happening to five or ten people it’s not really the right venue to be able to bring a case. But, it sounds like it’s happening to a lot of people.
The other thing you have to look at is how common the claims are. So, if the claims are arising out of the same questions of law and fact then you could bring a class action.
So, we’ll look at this situation and say, “Ok, people are having their credit limit lowered. Is it because their contract allows the credit card companies to lower the limits? Or is there another reason why it’s OK for the credit card companies to lower the limits? ”
Some people will have credit card terms and conditions that will allow for the credit card to lower their limit, to change their interest rates, to do pretty much anything they want at will. Some people won’t.
So, we need to be able to look at that, and be able to understand what each particular situation is and see if there’s a pattern going across a large number of people.
Connie: Ok, so the first thing that our readers are going to need to do is to pull out their terms and conditions and take a close look at what their rights are.
Samuel: Right, because if there are ten different credit card companies they are each going to have different terms and conditions, and they may have different terms and conditions for each of the credit cards that they offer. So, each person may have a slightly different situation.
Now, the terms and conditions may be similar enough that we’d be able to bring a class across one company and say, “OK, you didn’t have terms in there that allowed you to lower the credit limit, and so you couldn’t have lowered the credit limit the way that you did.”
At first, it’s a case by case situation to be able to see what’s happening to individuals, and then we try to apply that to a large group of people.
Connie: I understand. One thing that I think our readers will need to know – especially anyone that gets their statements electronically – is that they’re going to definitely want to go back into their accounts and see if there was a notice of change of terms. They might not have gotten that in the mail.
Samuel: Right. Often times credit card companies are pretty sneaky about that. They put a clause in their agreements that says “We can change your terms at any time.” So, even if there isn’t a clause that allows them to lower the credit limit on the first agreement that you agreed to, over the time that you’ve had the agreements, excuse me, that you’ve had the credit card, they may have snuck one in.
So, you have to be very careful to be able to go across all of their agreements and make sure that they haven’t snuck that clause in there.
Connie: I understand. I know we have some readers out there that are very upset.
If they want to go back through, and check their terms and conditions and make sure that there’s nothing saying that they credit card company can do that, and they do want to be a part of a class action suite, how would we get that started?
Samuel: Well, your readers can look at their documents and then feel free to visit my website at Deskin Class Action Law.com or to call me at 800-709-8978.
I’ll be very happy to go over the agreements with them and we can read through and figure out what’s going on, and see if there is a case to be brought.
Oftentimes, we look at these agreements and we look at the situation and we find other things that are going on. Like, you mentioned earlier that they are lowering credit limits. Well, the effect of lowering credit limits may affect the person’s credit score. There may be some issues there. We should look over the entire agreement together and be able to understand what kinds of issues are being raised by these practices by the credit card companies.
Connie:Well, that sounds wonderful. We will put your information on our website as well as a transcript of this for anyone who is listening and wants the full report.
I really appreciate you joining us today Mr. Deskin. Is there anything else you think our listeners need to know before we sign off here?
Samuel: Well, there are many, many credit card companies out there and they are all hurting right now. And they’re all trying to find a way to be able to increase their bottom line. But, at the end of the day, them increasing their bottom line means taking money out of individual’s pockets to line theirs.
So, you should be very careful about the credit cards that you agree to take, and the effects of those company’s business decisions on your own credit and your lifestyle.
So, be wise about the credit that you spend, and be careful who you decide to do business with. So, that would be my two cents.
Connie: Thank you for joining us Mr. Deskin, we really look forward to talking to you again in the future.
Samuel: No problem, take care Connie.
Connie: Thank you guys for listening. If you have any questions about this broadcast, you can check out our website at Ask Mr Credit Card.com
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