WASHINGTON — A card issuer that marketed Visa and MasterCards specifically to the subprime market will have to reverse more than $114 million it charged cardholders in fees, as part of a settlement reached with the Federal Trade Commission.
The commission announced that the settlement came as a result of a lawsuit the agency brought against CompuCredit Corporation and a wholly owned collections subsidiary Jefferson Capital Systems alleging deceptive contact in issuing the cards and abusive practices while collecting debts.
"This settlement is a big win for consumers," said Lydia B. Parnes, director of the FTC's Bureau of Consumer Protection. "When signing up for a credit card, consumers have the right to know the truth about the amount of credit they are getting and the cost of that credit up front."
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According to the FTC's complaint, CompuCredit marketed credit cards, primarily through direct mail solicitations, under various brand names, including Aspire, Aspire A Mas, FreedomCard, Tribute, Imagine, Majestic, Aspen, Emerge and Fingerhut Credit Advantage.
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