Credit Repair Organization sued by Consumers

Wednesday, November 9th, 2011
Updated: November 9th, 2011
The content is accurate at the time of publication and is subject to change.

Consumers have the right to sue. If they are dissatisfied, they have the absolute right to sue. That principle, once a undeniable truth, is being debated by the Supreme Court this week as a company called CompuCredit, a subprime credit card company, is currently being sued by three of its customers in federal court.

The customers claim that the company practiced deceptive measures that did not comply with the 1996 Credit Repair Organizations Act, which requires that credit repair organizations treat customers fairly and openly.

Wanda Greenwood, Deborah McCleese, and Ladelle Hatfield are the three plaintiffs. All three customers signed up for a CompuCredit marketed credit card. All three customers had bad credit, and were under the impression that the CompuCredit card would help them start over and get their credit score back on track. Upon signing up for the account, CompuCredit threw in $300 of credit that would be immediately available, with absolutely no money down.

The three plaintiffs were excited, but after the monthly account fee, finance charge, and payment of the annual fee, there was only an available credit of $114.50 out of the original $300. The particular card in question was labeled as a “fee harvester.” These types of credit cards have low credit limits, but carry very high fees. CompuCredit was reprimanded for not fully revealing the scope of its fee-harvester cards. Thousands of consumers every year would fall for this trap; it got so bad that the Credit Card Accountability, Responsibility and Disclosure Act of 2009 banned these types of cards.

In this particular suit, the company is being sued for saying that customers were not allowed to bring lawsuits because of contracting issues. CompuCredit said that customers were not allowed to file lawsuits against the company because the contract between the company and these three customers said that they could only impose their rights through settlements. CompuCredit was effectively silencing the customers, as settling a dispute guarantees that the dispute will not be heard by a jury or reviewed by a judge in a public setting.

The main purpose of the act was to protect people from fake companies promising credit card repair, and offering nothing. The act clearly states that “You have a right to sue a credit repair organization that violates.” This means that the actions of CompuCredit were in direct violation, but the customers signed the contract giving away their right to a fair trial and impartial jury. That is also covered under the act, as it states, that the “waiver by any consumer of any protection” will be “treated as void” and “may not be enforced by any federal or state court or any other person.”

CompuCredit defends their position and lawyers in the camp claim that the wording of the act is not “sufficiently explicit,” and this doesn`t give the customers the right to sue if they contracted to a clause of arbitration.

This isn`t the first case of this kind. In the spring of this year, AT&T Mobility v. Concepciondealt with a case where customers unsuspectingly signed a settlement clause in a cell phone contract. Customers who signed that contract with the clause had to have their right to be a part of a class actions suit against AT&T.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

Latest Bad Credit Card News

Wednesday, December 27th, 2023

Credit cards allow you to pay for everyday or large purchases and have a small window to pay them off. All purchases made during the billing period of 28 to 31 days are added to your statement balance. After the end of each billing cycle, you receive a statement with your total balance owed and […]

Wednesday, June 22nd, 2022

If you have less than a perfect credit, a limited credit history, or recent derogatory marks on your credit report, you may have trouble applying for many of the credit card options currently available on the market. But there is another way to prove that you can handle credit responsibly: a secured credit card. Since […]

Monday, February 7th, 2022

On the threshold of the most romantic holiday, WalletHub published the results of the so-called Valentine’s Day Spending Survey. 1,000 men and women from across the U.S. participated in the poll. The questions concerned not only the expenses and expectations before February 14, but also how the financial situation may affect a relationship. The most […]

Sunday, June 28th, 2020

The numbers of co-branded credit cards have grown again. It seems that any more or less large company now strives to launch its own credit or at least debit card. Just remember the Apple Card. This time it’s Verizon’s turn. Starting today, June 26, its new Verizon Visa Card is officially released and available for […]

Thursday, January 23rd, 2020

As a new online Bankrate survey of almost 2,5 thousand respondents shows, 84% of Americans face financial product denials. The bigger part of millennials (22-36 years old), namely 58%, was rejected for a credit card or another credit product at least once. The reason is their bad credit score.

Best Credit Offer
Surge® Platinum Mastercard®
Check off the cards you want to compare. Then click the Compare link to go to the comparison table.
Consumer Rating: 4 / 5
Horizon Card Services Group One Freedom Card
Copyright © 2001-2024 All Rights Reserved.

See the credit card's terms and conditions on the online application page. Note that this website may be compensated by credit card issuers when the visitor applies for a card through the links on this website. We do our best to maintain all information accurate and up to date. However, we do not warrant the credit card information won't change. Click the "Apply Online" button and review the current info on the secure credit card terms page.

Information in these articles is brought to you by Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles.

The webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the website are property of their respective owners.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions. makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that may be compensated by the credit card issuers when the readers apply for a credit card through this site. is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. does not review or list all available financial or credit offers.

You've successfully subscribed!

Please specify the following:All these fields are optional

Thank you for providing this information! We will make sure our letters are useful for You.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.