Hawaii sues credit card issuers for faulty consumer charges

Seven major credit card companies and banks have been sued by the state of Hawaii for charging customers for products and services they didn't sign up for. The lawsuit is the latest in a string of complaints about what are being called fraudulent or erroneous charges by banks trying to recoup the losses felt from the Dodd-Frank Wall Street Reform and Consumer Protection Act, which put caps on the amount of fees banks could charge retailers for debit card transactions.

Bank of America, Chase, Citi, Barclays, Capital One, Discover, HSBC and their subsidiaries were all named in the suit, the Huffington Post reports. The suit alleges "predatory tactics to sign up customers for services they either don't want or don't qualify for," and the companies charged customers "without their knowledge or consent." The state of Hawaii wants the companies to stop the practices, make restitution to credit card customers and pay fines.

Hawaii Attorney General David M. Louie asked residents to check their credit card statements for charges relating to payment protection, the Star Advertiser in Honolulu reports. The story notes penalties for the credit card companies could be $500 to $10,000 for each violation. Louie is quoted as saying customers could have been charged an average of $150 each in incremental charges.

Lawsuits have also been filed against credit card companies in California, Minnesota and West Virginia, while other states are investigating claims of similar payment protection charges. The effort to add fees to credit card and debit card customers has increased in recent years as the Dodd-Frank Act expanded to include such additions as the Durbin Amendment which limited the fees customers could be charged on debit transactions. The amendment went into effect in July 2010.