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Greenwood v. CompuCredit Corp. (9th Cir. - Aug. 17, 2010)

By Shaun Martin

I don't know if you ever received an "Aspire" VISA card offer in the mail. I know I did. Several times. The thing was clearly targeted to unsophisticated consumers with terrible credit. It was a horrendous deal, and the company was clearly preying on people who didn't know how to read very well. I threw the solicitations away, and hoped that everyone else did also. Yet I knew all too well that the company was spending all this money on postage for a reason.

Needless to say, a number of people signed up. For a deal that told them that there was "no deposit required" and that they'd immediately receive $300 in available credit. Which, yeah, they indeed received.

But the card had a $29 finance charge. A $6.50 monthly "account maintenance fee." And a $150 annual fee. All charged in advance. Listed, of course, in small print.

So, yes, they got $300 in "credit". And were promptly charged $257 in fees. So you paid $257 for the right to charge $43 on a card.

What a great deal. I'm sure everyone who signed up for that one did so with full knowledge of the terms. Yep. Positive of it. This isn't a credit card company that's simply ripping people off with tactics that are totally unethical. No. Not at all. (Parenthetically, I noticed that the Motley Fool called the Aspire Card "The Worst Credit Card Ever" -- no small feat!)

Fortunately, they get sued. In a class action. Although this appeal isn't about the merits, it is about the validity of some additional small print in the offer. Which, predictably, prevents the filing of class actions. Or lawsuits of any kind. Instead funneling individual complaints to that by-now-infamous arbitral tribunal, the National Arbitration Forum.

The credit card company loses. In a divided 2-1 opinion.

And I weep for them.

Full post as published by California Appellate Report on August 18, 2010 (boomark / email).