Bank fined $9M in debt case, Credit card issuer contends federal laws trump state court as issue heads to appeal

ALBANY — A court has ordered a nationwide bank to pay nearly $9 million in restitution and penalties for using fraudulent and deceptive selling tactics that put consumers in deep debt, state Attorney General Eliot Spitzer said Wednesday. In a civil suit filed in 2003, Spitzer argued that Cross Country Bank, which markets high-interest credit cards to consumers with bad credit, deceived customers into applying for cards with credit lines of up to $2,500. Most received credit of no more than $400, which was immediately applied to fees imposed by the Wilmington, Del.-based bank.

The compounding fees and finance charges trapped unwary consumers in a mountain of debt.

Cross Country’s debt collector, Applied Card Systems, then tormented delinquent customers with abusive collection practices that included rude and sometimes obscene language, repeated and disruptive phone calls, and improper threats, Spitzer’s office said.

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