A formal Complaint has been filed in state court and transferred by the bank to federal court, and is awaiting the Court's ruling on the bank's Motion to Dismiss. Excerpts of that Complaint follow. It is believed that there may be a class action pending in Chicago against the same bank. COMPLAINT IN CIVIL ACTION 1. At all times material, Plaintiffs were and are individuals residing in Allegheny County, Commonwealth of Pennsylvania. 2. At all times material, Defendants (hereinafter referred to as "Defendant" ) appear to be three separate entities engaging in business as a single credit card bank located at , and created for the sole purpose of engaging in a multi-state credit card operation. 3. At all times material, Defendant was and is a federally insured, Virginia state-chartered bank, authorized and existing pursuant to the laws of the Commonwealth of Virginia as codified at Va. Code Ann. Section 6.1-330. et sec. including but not limited to Section 6.1-392.1. 4. Jurisdiction lies concurrently in Your Honorable Court as well as in the United States District Court for the Western District of Pennsylvania as the issues raised in this proceeding arise in part under federal law. See the Depository Institutions Deregulation and Monetary Control Act of 1980, 12 U.S.C. Section 1831d. 5. Under said federal Act, Defendant is authorized to export the most favorable interest rate and other terms allowed under the laws of the state where it is located (Virginia) to transactions with its customers who reside outside of its home state of Virginia. 6. As a consequence, Defendant is statutorily permitted to assess whatever interest and other charges are permissible under Virginia law on its customers nationwide, irrespective of whether those statutory provisions are inconsistent with the laws of the states in which those individuals reside (which as to Plaintiffs Is Pennsylvania). 7. The subject matter of this civil action concerns membership fees and late fees imposed by Defendant on MASTERCARD credit card accounts. COUNT ONE: v. DEFENDANT THE MEMBERSHIP FEE 8. The allegations set forth in Paragraphs 1 through 7 above are incorporated by reference herein as though the same were to be repeated at length herein. 9. The Virginia Code Annotated at Sections 6.1-330.63 and 6.1-330.78 and elsewhere authorizes the imposition of a membership fee or participation fee by Defendant for availability of an open ended credit card account. 10. An account which has been closed is no longer one wherein there is an "availability of a credit card account" [as per Section 6.1-330.78 C (1)(b) of the Virginia Code Annotated] but rather upon closure with a balance still owing becomes an installment debt per Section 6.1-330.80 of the Virginia Code Annotated. 11. A credit card account supposes an open and available line of credit which may be drawn upon by the customer up to the amount of the credit line: neither Plaintiff has one at Defendant. 12. On February 25, 1994, Defendant opened an open ended MASTERCARD account for Plaintiff and issued him a MASTERCARD bank card with credit availability. This account was a consumer account and was used by Plaintiff as such. 13. On July 18, 1996, Plaintiff closed said MASTERCARD account at Defendant by telephone and he cut up and returned his MASTERCARD to Defendant with a letter confirming closure of his account as instructed whereby the balance owing became an installment debt. 14. On March 1, 1997, and again on March 1, 1998, Defendant imposed upon Plaintiff a $20 membership fee yet Plaintiff's account had been closed since July 18, 1996 from which time there had not been any line of credit upon which Plaintiff could draw. 15. Plaintiff requested Defendant to refund the membership fees which Defendant has failed and refused to do. 16. The imposition and collection of the annual membership fee by Defendant was intentional: it was not done in error. 17. Indeed, Defendant has informed Trans Union Credit Bureau that Plaintiff's account was "closed by consumer", and that the account had been opened 02/94 and closed 04/96. 18. Plaintiff seeks a refund of the $40 in membership fees Defendant had collected from him, plus interest, plus attorney's fees, and any and all other relief and damages as may be authorized by Sections 6.1-431 and 6.1-330.79 of the Code of Virginia. 19. In addition, under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. Section 201-1 et seq., Plaintiff seeks $100.00 which is a sum greater than treble damages (3 times $20) with reference to each of the two $20 membership fees Defendant collected from him, which amounts to $200.00, plus reasonable attorney's fees, plus such amount of punitive damages as may be awarded by Your Honorable Court and such other relief as may be granted by Your Honorable Court under the circumstances [see 7 F. Supp. 2d 589 (1998)]. WHEREFORE, Plaintiff demands judgment in his favor and against Defendants in an amount less than $25,000 and in an amount that is within the jurisdiction of the Arbitration Division of Your Honorable Court, plus costs. COUNT TWO: v. DEFENDANT THE MEMBERSHIP FEE 20. The allegations set forth in Paragraphs 1 through 11 above are incorporated by reference herein as though the same were to be repeated at length herein. 21. During January of 1996, Defendant opened an open ended MASTERCARD account for Plaintiff and issued a MASTERCARD bank card with credit availability. This account was a consumer account and used by Plaintiff as such. 22. Plaintiff had not used said MASTERCARD account since March 26, 1996 at which time he charged a purchase at a gasoline service station. 23. During July 1996, Plaintiff closed said MASTERCARD account at Defendant at which time the balance owing became an installment debt. 24. On January 10, 1997, Defendant imposed upon Plaintiff a $20 membership fee yet Plaintiff's account had been closed since July of 1996 from which time no line of credit was available upon which Plaintiff could draw. 25. The imposition of an "annual" membership fee upon Plaintiff by Defendant on January 10, 1997 was intentional: it was not done in error. 26. Defendant's January 10, 1997 billing statement to contained the following language: "Renewing Your Account. If a membership fee appears on the front of this statement, you have 30 days from the date this statement was mailed to you to avoid paying the fee or to have such fee credited to you if you cancel your account. During this period, you may continue to use your account without having to pay the membership fee. To cancel your account, you must notify us in writing at the address for inquiries shown on the front of this statement and pay your "New Balance" in full (excluding the membership fee) prior to the end of the 30-day period." 27. The "New Balance" set forth on Defendant's January 10, 1997 billing statement was in the amount of $134.34, and it included the "PREVIOUS BALANCE" in the amount of $94.51 plus "NEW TRANSACTIONS" in the amount of $38 (i.e. a PAST DUE FEE of $18 plus the MEMBERSHIP FEE of $20) and it included finance charges. 28. On January 22, 1997, Defendant seized $154.34 from funds belonging to the Plaintiff which he had on deposit in a savings account with Defendant. 29. Included in Plaintiff's funds seized by Defendant was the $20 membership fee imposed twelve days earlier on January 10, 1997. 30. When Defendant seized Plaintiff's funds on deposit in his savings account with Defendant, Defendant paid itself out of the seized funds the $20 membership fee imposed on January 10, 1997. 31. Defendant charged off Plaintiff's MASTERCARD account on January 22, 1997. 32. As of January 22, 1997, Defendant had actual knowledge that Plaintiff's MASTERCARD account was paid in full and closed. 33. As of January 22, 1997, Defendant had actual knowledge that within 30 days from the date of Defendant's January 10, 1997 statement to Plaintiff, the "New Balance" amount appearing on Defendant's January 10, 1997 billing statement to Plaintiff had been paid in full. 34. The collection by Defendant on January 22, 1997 of the $20 membership fee Defendant had billed Plaintiff on January 10, 1997 was intentional: it was not done in error. 35. Plaintiff requested Defendant to refund the $20 membership fee charged to him on Defendant's January 10, 1997 billing statement which Defendant seized from Plaintiff's savings account at Defendant on January 22, 1997. 36. Defendant has never tendered, and instead has refused to refund, said $20 membership fee. 37. Banks do not "charge off" open accounts. 38. Banks from time to time do charge off closed accounts with balances owing. 39. Defendant's billing statement dated February 10, 1997 to Plaintiff States : "01/22 DEPOSIT BALANCE OFFSET - CHARGE OFF -154.34." 40. Therefore, on January 22, 1997, when Defendant seized funds of Plaintiff in his savings account at Defendant and paid itself in full the amount claimed from Plaintiff as of that date, Defendant had actual knowledge in doing so, that Defendant had closed Plaintiff's MASTERCARD account. 41. Plaintiff seeks a refund of the $20 membership fee Defendant collected from him, plus interest, plus attorney's fees, and any and all other relief and damages as may be authorized by the Code of Virginia. 42. In addition, under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. Section 201-1 et seq., Plaintiff seeks $100.00 which is a sum greater than treble the amount of the membership fee, plus reasonable attorney's fees, plus such amount of punitive damages as may be awarded and such other relief as may be granted by Your Honorable Court [see 7 F. Supp. 2d 589 (1998)]. WHEREFORE, Plaintiff demands judgment in his favor and against Defendants in an amount less than $25,000 and in an amount that is within the jurisdiction of the Arbitration Division of Your Honorable Court, plus costs. COUNT THREE: v. DEFENDANT THE PAST DUE FEE 43. The allegations set forth in Paragraphs 1 through 7 and in Count ONE above are incorporated into this Count Three as though the same were to be repeated at length herein. 44. As of the moment that Plaintiff's MASTERCARD account with Defendant was closed in April of 1996 with a balance still owing, said account was no longer an open ended account subject to Sections 6.1-330.63 and 6.1-30.78 of the Virginia Code Annotated; rather, the account became an installment debt subject to Section 6.1-330.80. 45. Section 6.1-330.80 of the Code of Virginia states in Paragraph A: "Any lender or seller may impose a late charge for failure to make timely payment of any installment due on a debt, whether installment or single maturity, provided that such late charge does not exceed five percent of the amount of such installment payment and that the charge is specified in the contract between the lender or seller and the debtor. For the purposes of this section, 'timely payment' is defined as one made by the date fixed for payment or within a period of seven calendar days after such due date. . .." 46. From time to time during and subsequent to April 1996, Defendant has informed Plaintiff that Defendant " . . . must receive your payment in the enclosed envelope by 9AM on the due date printed on this statement or your account will be charged a late fee." 47. Defendant does not allow Plaintiff a grace period within which to make payment. 48. This is contrary to Section 6.1-330.80 of the Virginia Code. 49. From April 1996 to the present Defendant has from time to time charged Plaintiff past due fees. 50. "Past Due Fee" is another name for "Late Fee." 51. Each past due fee which Defendant charged Plaintiff after Plaintiff closed his account in April 1996 was in an amount in excess of 5% of the installment payment due, in violation of Section 6.1-330.80 (A). 52. The imposition upon and collection from Plaintiff of each past due fee by Defendant was intentional: it was not done in error. 53. Defendant has imposed upon and collected from Plaintiff late payment fees when payment was not late under the applicable law of the Commonwealth of Virginia [see Section 6.1-330.80 (A)]. 54. Plaintiff seeks a refund of each past due (late) fee which Defendant collected from him subsequent to April 1996, plus interest, plus attorney's fees, and any and all other relief and damages as may be authorized by the Virginia Code. 55. In addition, under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. Section 201-1 et sec., Plaintiff seeks for each such past due (late) fee collected from him, the sum of $100.00 which is a sum greater than three times the amount of each late fee collected, plus reasonable attorney's fees, plus such amount of punitive damages as may be awarded by Your Honorable Court and such other relief as may be granted by Your Honorable Court under the circumstances [see 7 F. Supp. 2d 589 (1998)]. WHEREFORE, Plaintiff demands judgment in his favor and against Defendants in an amount less than $25,000, which amount is within the jurisdiction of the Arbitration Division of Your Honorable Court plus costs. COUNT EIGHT: v. DEFENDANT CLAIM BASED UPON CONTRACT OF ADHESION 86. The allegations set forth above in Paragraphs 1 through 11, in COUNT TWO, in Paragraph 45, and in COUNT FOUR above are hereby incorporated by reference herein as though the same were to be repeated at length herein. 87. The imposition upon and collection from Plaintiff of past due fees by Defendant was intentional: it was not done in error. 88. Defendant has imposed upon and collected from Plaintiff past due fees when payment was not past due under the applicable law of the Commonwealth of Virginia. 89. Attached hereto and identified as exhibits and hereby incorporated by reference herein as though the same were to be repeated at length herein are photocopies of the following documents received by the Plaintiff: Exhibit 1 - Defendant's billing statement dated 05/10/96, Exhibit 2 - Defendant's billing statement dated 07/10/96, Exhibit 3 - Defendant's billing statement dated 09/10/96, Exhibit 4 - Defendant's billing statement dated 12/10/96, Exhibit 5 - Defendant's billing statement dated 01/10/97, Exhibit 6 - Defendant's billing statement dated 02/10/97. 90. Plaintiff does not possess billing statements from Defendant dated 06/10/96, 08/10/96, 10/10/96 or 11/10/96 but will seek production of these during discovery. 91. On May 10, 1996, Defendant mailed Plaintiff the original of the document designated Exhibit 1 hereto. 92. Said statement indicated that Defendant sought $117.93 from Plaintiff. 93. On May 31, 1996, Plaintiff mailed Defendant the sum of $117.93, thereby paying in full the TOTAL NEW BALANCE on said statement. 94. Defendant received said payment. 95. Defendant asserted that the said payment arrived late. 96. Defendant imposed upon Plaintiff a finance charge in the amount of $1.46 on said TOTAL NEW BALANCE of $117.93. 97. The finance charge was stated on Defendant's June 10, 1996 billing statement. 98. The TOTAL NEW BALANCE set forth on the June 10, 1996 billing statement was $1.46. 99. A photocopy of Defendant's July 10, 1996 billing statement to Plaintiff, designated as Exhibit 2 hereto, reflects a PREVIOUS BALANCE of $1.46. This is the same $1.46 that was the TOTAL NEW BALANCE stated on the June 10, 1996 billing statement. 100. The July 10, 1996 billing statement also has a finance charge in the amount of two cents. 101. The TOTAL NEW BALANCE stated on the July 10, 1996 billing statement from Defendant is $1.48. 102. The amount $1.48 on the July 10, 1996 billing statement consisted of the finance charge of $1.46 imposed on Defendant's June 10, 1996 billing statement and a two cent finance charge imposed on the $1.46 finance charge imposed on the June 10, 1996 billing statement. 103. Plaintiff telephoned Defendant during July 1996 to discuss his account. 104. During said telephone conversation, Plaintiff questioned the two cent finance charge that appeared on Defendant's July 10, 1996 billing statement. 105. During said telephone conversation Plaintiff told and instructed Defendant's employee to close his MASTERCARD account at Defendant, and that he was not going to pay the two cent finance charge appearing on the July 10, 1996 billing statement. 106. Plaintiff had not used his MASTERCARD account at Defendant since March 26, 1996. 107. Plaintiff on July 17, 1996, mailed Defendant a $1.46 payment. 108. July 17, 1996 was the last date Plaintiff made any payment on his MASTERCARD account. 109. Defendant issued Plaintiff a billing statement on August 10, 1996. 110. Said billing statement contained a TOTAL NEW BALANCE in the amount of $18.33. 111. The sum $18.33 appearing on the August 10, 1996 billing statement was composed of a past due fee in the amount of $18 plus a finance charge in the amount of 31 cents plus a previous balance of 2 cents. 112. The 31 cent finance charge was 1.62% of $18.02. 113. On September 10, 1996, Defendant mailed Plaintiff a billing statement, a photocopy of which is designated as Exhibit 3 hereto. 114. The TOTAL NEW BALANCE stated on the September 10, 1996 billing statement was $36.91. 115. The amount $36.91 on the September 10, 1996 billing statement consisted of the PREVIOUS BALANCE from the August 10, 1996 statement in the amount of $18.33 plus an $18 past due fee plus a finance charge of 58 cents. 116. The 58 cent finance charge was computed as 1.62% of $36.00. 117. The amount $36.00 is the total of the $18 past due fee imposed on the August 10, 1996 billing statement and the $18 past due fee imposed on the July 10, 1996 billing statement. 118. 1.62% of $36.33 is exactly 58.8546 cents, which rounds off to 59 cents. 119. 1.62% of $36.00 is exactly 58.32 cents, which rounds off to 58 cents. 120. Defendant on its September 10, 1996 billing statement to Plaintiff charged him a finance charge on two late charges (i.e. the July 12, 1996 and the August 12, 1996 past due fees) . 121. Defendant did not include the previously assessed interest charges in its computation of finance charge on the September 10, 1996 billing statement. 122. Defendant sent a billing statement to Plaintiff dated October 10, 1996. 123. The TOTAL NEW BALANCE on said October 10, 1996 billing statement was comprised of the PREVIOUS BALANCE of $36.91 on Defendant's September 10, 1996 billing statement plus a past due fee of $18 imposed on or about September 11, 1996 plus a finance charge. 124. Defendant sent a billing statement to Plaintiff on November 10, 1996. 125. The TOTAL NEW BALANCE on said November 10, 1996 billing statement was comprised of the PREVIOUS BALANCE on Defendant's October 10, 1996 billing statement plus a past due fee of $18 imposed on or about October 11, 1996 plus a finance charge. 126. Defendant sent a billing statement to Plaintiff on December 10, 1996. 127. A photocopy of said billing statement is designated Exhibit 4 hereto. 128. The TOTAL NEW BALANCE on said December 10, 1996 billing statement was in the amount $94.51 and was comprised of a PREVIOUS BALANCE in the amount of $75 from the November 10, 1996 billing statement, plus a past due fee of $18 imposed on November 11, 1966 plus a finance charge of $1.51. 129. On January 10, 1997, Defendant sent Plaintiff a monthly billing statement. 130. A photocopy of this billing statement is designated Exhibit 5 hereto. 131. The TOTAL NEW BALANCE stated on the January 10, 1997 billing statement was $134.34. 132. The TOTAL NEW BALANCE of $134.34 appearing on the January 10, 1997 billing statement was comprised of the PREVIOUS BALANCE of $94.51 from the December 10, 1996 billing statement, plus a past due fee in the amount of $18.00 imposed on December 11, 1996 and a MEMBERSHIP FEE in the amount of $20.00 imposed on January 10, 1997, and a finance charge of $1.83. 133. The finance charge of $1.83 is 1.62% of $112.51, and $112.51 is the total of the PREVIOUS BALANCE of $94.51 from the December 10, 1996 billing statement plus the past due fee of $18 imposed December 11, 1996. 134. No finance charge was assessed on the MEMBERSHIP FEE as the MEMBERSHIP FEE itself was only imposed on the date of the billing statement, January 10, 1997. 135. The "TOTAL MINIMUM AMOUNT DUE" by the "PAYMENT MUST BE RECEIVED DATE" of February 10, 1997 stated on Defendant's January 10, 1997 billing statement to the Plaintiff was $60.02. 136. This means that had Plaintiff paid Defendant $60.02 and said $60.02 had been received by Defendant by February 10, 1997, said $60.02 payment would have been timely made. 137. Defendant did not wait until February 10, 1997 to ascertain whether Plaintiff had made payment by that date. 138. On February 10, 1997, Defendant sent Plaintiff a billing statement. 139. Said billing statement is designated Exhibit 6 hereto. 140. The TOTAL NEW BALANCE on the February 10, 1997 billing statement was $154.34. 141. The TOTAL NEW BALANCE of $154.34 set forth on the February 10, 1997 billing statement was comprised of the PREVIOUS BALANCE of $134.34 plus a $20 past due fee imposed January 11, 1997. 142. Defendant's February 10, 1997 billing statement to the Plaintiff states that Defendant on January 22, 1997 received $154.34, which was the total amount claimed from Plaintiff. 143. Defendant received the full amount claimed by seizing Plaintiff's savings account at Defendant. 144. Payment of defendant's February 10, 1997 billing statement to the Plaintiff, including the PAST DUE FEE of $20 imposed January 11, 1997 appearing thereon, was due by March 10, 1997. 145. Payment was not due at the time Defendant seized it from Plaintiff's savings account on January 22, 1997. 146. As a result thereof, Plaintiff has been damaged. 147. Plaintiff seeks a refund of each fee or charge which Defendant imposed and collected by seizure from him, plus interest, plus attorney's fees, and any and all other relief and damages as may be authorized by applicable law. WHEREFORE, Plaintiff demands judgment in his favor and against Defendants in an amount less than $25,000, which amount is within the jurisdiction of the Arbitration Division of Your Honorable Court plus costs. A JURY TRIAL IS RESPECTFULLY DEMANDED. Respectfully submitted, Attorney for Plaintiffs
