Cross Country Bank will pay $1.5 million to settle a consumer fraud investigation by the state of West Virginia, Attorney General Darrell McGraw said.
"We believe the settlement constitutes a fair resolution of all outstanding claims and we were pleased with the Banks willingness to stipulate to a permanent injunction that provides substantial protections for West Virginia consumers," McGraw said.
Cross Country Bank will pay $1.5 million to fund consumer education programs. The settlement also resolves actions against the bank's affiliate, Applied Card Systems, Inc., and its principal owner, Rocco Abessinio.
"The settlement structure was in keeping with my long-held belief that this office must fight for and educate consumers as to their rights. The monetary relief obtained will help fund ongoing consumer education and ensure that West Virginia consumers are well-informed of their rights and the consequences of their actions," McGraw said.
McGraws office had waged an aggressive investigation into the bank and credit card companys collections practices, charging them with violating West Virginia consumer protection laws. In 2003, 40 former employees of Applied Card Systems' Beckley, West Virginia office came forward to allege that the company was engaging in serious debt collection abuse of hundreds of thousands of consumers across the nation and in West Virginia.
The employees further charged that the unlawful practices were condoned by upper management and were encouraged and rewarded through bonuses and other incentives. McGraw's office then opened an investigation into the allegations.
