Providian to Refund $300 Million to Consumers Over Alleged Abusive Credit Card Practices

(SAN FRANCISCO) – Attorney General Bill Lockyer and San Francisco District Attorney Terence Hallinan today announced that Providian Financial Corp., the nation's sixth largest credit card company, will refund more than $300 million to consumers under a major settlement filed with the San Francisco Superior Court.

Additionally, Providian agreed to halt and change what had been criticized as deceptive sales tactics and abusive lending practices. While admitting no wrongdoing, the company also will pay $5.5 million in civil penalties.

"Refunds will be going to Californians who were victimized in the last five years by Providian with unfairly imposed fees and charges for unauthorized services," Lockyer said. "In addition, we now have court-ordered protections against misleading come-ons for credit card business, hidden and unjustified charges, and unauthorized add-on services. District Attorney Hallinan was instrumental in the fight against these consumer abuses."

Applying statewide, the judgement issued by the San Francisco Superior Court outlines the consumer refund plan and changes to be made in Providian's sales practices and customer disclosures. Among other things, the company has agreed to change its consumer notices to clearly and conspicuously disclose in advertising, written solicitations and telemarketing all fees that a consumer must pay to open or maintain a Providian account. The company also has agreed to obtain a clear, unambiguous request before enrolling a customer in its credit card-related services, such as credit protection plan.

Cooperative in settling consumer complaints in the case, Providian will be mailing refund checks under the supervision of the San Francisco District Attorney. Among those eligible for refunds are Californians who did business with Providian since June 15, 1995 who were improperly charged for balance transfers, late payment fees, "Credit Protection" fees or promotional "Real Check" or "cash advance" checks.

California consumers who believe they may have been inappropriately charged fees or enrolled for credit card services without authorization should contact the company and provide a copy of the complaint to Attorney General's Office or San Francisco District Attorney's Office.