The companies that issue credit cards and those that hold credit cards will be watching the new Supreme Court case very closely. McCoy v. Chase Manhattan Bank, USA, will be heard by the Supreme Court during its next session, which begins in October. The case is a class-action suit that alleges credit card companies cannot retroactively increase the interest rate on a card without notification. The card issuer is claiming that there was notification – in the initial card holder agreement that was signed.
Article Source: U.S. Supreme Court to consider credit card notification by Personal Money Store
The case of the credit card holder
In McCoy v. Chase Manhattan Bank, James A. McCoy is claiming that Chase Manhattan violated the law when it raised his credit card interest rate. McCoy was late with his payment on the credit card, and Chase retroactively increased his interest rate on all transactions for the month. The increase was outlined in the agreement for the card, but McCoy did not receive separate notification. McCoy claims that this modification was illegal under the new Truth in Lending Act.
The case of the credit card issuer
Chase Manhattan Bank, who appealed this case to the Supreme Court, claims the company complied with the Truth in Lending Act. The TILA does require that these short term lenders deliver written notice of changes in the interest rates on cards. The TILA has one provision that says if an item has been agreed to in the past, they do not have to re-notify the card holder. In the end, the debate is over ambiguity in the law versus natural interpretations.
Provisions for late payments in the agreements
This supreme court case started because of a late credit card payment. The amount that unsecured loan companies charge customers is required to be disclosed, according to the Truth in Lending Act. What is your opinion: Should cardholders keep a copy of the agreement with them at all times, or should card companies provide multiple notifications?
No comments:
Post a Comment