First USA, Bank One's credit card issuing unit, has proposed paying $40 million to settle lawsuits alleging improper charges.
A class-action lawsuit filed in the U.S. District Court in East St. Louis, MO, alleges that First USA issued improper late fees and finance charges to its customers. The proposed $40 million settlement is outlined in a letter First USA sent late last month to its customers. The company said that millions of letters were sent but declined to provide the exact number.
According to the letter, the settlement would affect only customers whose payments were handled in the Atlanta or Louisville, KY, facilities of third-party vendor National Processing Co. from Jan. 1, 1998, to Aug. 31, 1999.
The court has scheduled a Jan. 24 hearing to determine whether to approve the settlement.