Separate complaints filed this week in state district court claim that several banks are violating the New Mexico Unfair Practices Act by charging cardholders about $100 a year for ancillary products that are often useless.
Under the practice known as "slamming," telemarketers call cardholders ostensibly to thank them and remind them of benefits they already have, then, according to the complaints, "speed through, skip altogether or alter the text of the information they are required to provide."
"Although the cardholder believes they have just listened to a courtesy call, (the banks) treat any affirmative response . as the cardholder's agreement to enroll in the ancillary plan," the complaints allege.
Prosecutors contend that no effort is made to determine if the consumers are eligible for the benefits associated with the protection plans. For example, elderly customers are often targeted for plans that propose to suspend payment obligations if a customer loses his job, even though elderly customers on fixed incomes are ineligible for these benefits.
Named as defendants are JPMorgan Chase & Co. Barclay's Bank of Delaware, Capital One Bank, Bank of America Corp., City Group, GE Capital Retail Bank and HSBC Bank Nevada.
The complaints are signed by Assistant Attorney General Scott Fuqua and two private attorneys. The private firms are on contract to negotiate potential settlements with the banks, according to The Santa Fe New Mexican ( http://bit.ly/11rnYDo).
Suzanne Ryan, a spokeswoman for JPMorgan Chase's Western region in Southern California, declined comment on the pending litigation.
The attorney general's office is asking that the banks be enjoined from "engaging in unfair or deceptive practices and unconscionable conduct" and that the judge impose civil penalties of up to $5,000 per act that violates of state law.
Information from: The Santa Fe New Mexican, http://www.sfnewmexican.com