COURT FINDS “NO ANNUAL FEE” DISCLOSURE MISLEADING

rossman v. fleet bank (r.i.) national association

by Deborah Freye*

The United States Court of Appeals for the Third Circuit, on February 8, 2002, reversed the dismissal of a consumer’s credit card solicitation claim under the Truth in Lending Act (TILA) against the issuing bank. The court remanded the case to the United States District Court for the Eastern District of Pennsylvania for trial on the merits of the claim.

The appellate court found that a “no annual fee” disclosure in a credit card solicitation implies a duration of one year. Unless the credit card agreement contains the same “promise,” the solicitation disclosure is inaccurate and violates the TILA. The court also found that a “no annual fee” disclosure made by a bank that intends to impose an annual fee “shortly after” account opening is misleading and inaccurate for purposes of the TILA.

There are several strategies for addressing the issues raised by the court regarding accurate credit card solicitation disclosures and effective change‑in‑terms notices. If we can be of any assistance or if you would like a copy of the ruling, please do not hesitate to call us.

*Deborah Freye is an Associate with Dreher Tomkies LLP and is an editor of the Firm’s Credit Card Digest. Her direct dial number is 614-628-1611.