American Express Agrees to Settle Interest Rate Class Action Lawsuit

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According to documents filed Wednesday in California federal court, American Express has agreed to pay up to $6 million to settle a class action lawsuit over allegations it violated the Truth in Lending Act by increasing cardholders’ fixed interest rates without notifying them.

Plaintiffs Alfredo M. Lopez and Lauren R. Greene allege American Express promised them a fixed annual percentage rate of interest (APR) for their credit cards. According to their class action lawsuit, American Express changed the APR to a higher rate after they incurred a balance. The plaintiffs allege that American Express failed to indicate the possibility that the fixed rate could be changed to a variable rate. The interest rate class action lawsuit asserted claims for violation of the Truth in Lending Act and for breach of the covenant of good faith and fair dealing.

American Express has agreed to pay between $4 million and $6 million to settle the interest rate class action lawsuit. Under the terms of the proposed American Express class action settlement, Class Members who had an existing balance at the time of a rate increase will be eligible for a cash payment of $32.50. However, this amount may be reduced if the total value of claims exceeds the amount available in the settlement fund.

“These economic benefits are significant to Class Members, as individual American Express accountholders are unlikely to spend the time and money necessary to recover the relatively low value of the damages they incurred under American Express’s policy of converting APRs,” the plaintiffs say in their motion for preliminary approval of the class action settlement.

Class Members of the proposed American Express class action settlement include American Express credit card accountholders in the United States who had a fixed APR for purchases on the account that was increased or changed to a variable rate (or who received notice of an increase in the fixed rate or a change to a variable rate) between Oct. 1, 2005 and Dec. 31, 2010. More than 4.7 million American Express card holders are estimated to be eligible for benefits from the interest rate class action settlement.

A preliminary approval hearing for the American Express class action settlement has been scheduled for Sept. 22, 2014.

More information about the American Express class action settlement was not immediately available.Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

The plaintiffs are represented by Matthew J. Zevin, Marc R. Stanley and Martin Woodward of Stanley Law Group; Michael D. Braun of Braun Law Group PC; Andrew S. Kierstead of Law Office of Andrew Kierstead; Peter N. Wasylyk of Law Offices of Peter N. Wasylyk; and John Koenig of Law Office of John Koenig.

The American Express Interest Rate Class Action Lawsuit is Alfredo M. Lopez, et al. v. American Express Bank FSB, et al., Case No. 2:09-cv-07335, in the U.S. District Court for the Central District of California.

UPDATE: The American Express Interest Rate Class Action Settlement is now open! Click here to file a Claim Form!

UPDATE 2: On Aug. 7, 2017, Top Class Actions viewers who filed valid claims for the American Express interest rate class action settlement began receiving checks worth as much as $117.33.