The Pacific Ocean isn't the only thing making waves on the shores of Hawaii nowadays. According to local sources, the State of Hawaii is now pursuing a lawsuit against several major credit card companies in their efforts to fight the unfair price gouging and invalid purchases that the state government claims is occurring.
Public records indicate that the lawsuit is being filed due to numerous consumer complaints about receiving charges on their credit card statements that were unauthorized and apparently added on by the credit card companies themselves. This practice has been referred to as 'slamming' and is a devious action where credit card companies try to offset losses onto other customers.
A total of seven banks were named in the lawsuit, including Bank of America, Capital One, Citi, Chase, Barclays, Discover and HSBC. Some consumers were deliberately deprived of knowledge regarding payment protections and other credit card features that would have prevented them from defaulting on certain purchases and bills. For example, some cards offer minimum monthly payments to their cardholders for a limited time in order to cover expenses during an unforeseen event such as unemployment.
The Attorney General's office of Hawaii had determined that these actions are in fact in direct violation of the newly passed CARD Act. Other states have pursued similar lawsuits with some success. The State of Hawaii is seeking damages in the amount of $10,000 per instance, which will be placed in the state's general fund. If successful like other states, Hawaii can expect a settlement of several million dollars at minimum. If the state chooses to go to court and challenge the perceived infractions directly, that number could multiply many times over.
Unfortunately, some fees are here to stay. The CFPB, the credit card watchdog agency in the US, recently declared that credit card companies can charge whatever amount they deem "necessary" when activating a new credit card.