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Credit Card Co. Accused of Subprime Abuse

OAKLAND, CALIF. (CN) - A federal class action accuses Compucredit Corp. of subprime credit-card abuse. Compucredit and Columbus Bank and Trust allegedly push Aspire Visa credit cards to "rebuild your credit," then take $257 in fees from the $300 in credit they offer.

Defendants allegedly advertise that consumers can get $300 in credit, then immediately take $29 for an "account opening finance charge," $6.50 per month as an "account maintenance fee" and take an "annual fee" of $150.

The aggregate first-year fees come to $257 of the $300 credit limit, or 85.7% of it, the class claims. They say these fees are "buried in other information in the advertisements," in small font, in violation of lending laws.

Plaintiffs demand restitution and punitive damages. They are represented by Hay Smith with Gilbert & Sackman of Los Angeles.

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