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Applied Card Systems, one of Palm Beach County, Fla.’s largest private employers, has been hit with an unfair trade practices lawsuit. The suit, which seeks class action status, was filed last Tuesday and alleges that the Delaware-based credit card servicing company and Cross Country Bank, which is owned by Applied, systematically imposed improper late payment fees and charged customers for services they had not requested, among other alleged violations. In a complaint filed in Palm Beach Circuit Court, attorneys for Caroline Loesch, a Sarasota, Fla., resident, allege that Cross Country, without notice or authorization, routinely charged new cardholders an application fee of $100 and an “applied advantage” fee of $34.95. The bank then began immediately to charge interest on those fees, prior to the cardholder’s receipt of either the card or the card-member agreement, according to the complaint. It further alleges that the two companies knowingly caused monthly statements to be mailed late, generating late payment fees as a result. Loesch’s attorneys include a nationwide team of class action specialists led by Scott Shepherd and Natalie Finkelman, partners in the Miami office of Shepherd Finkelman & Gaffigan in Miami, which is headquartered in Media, Pa. Co-counsel include attorneys from law firms in New York, San Francisco, Minneapolis, and Doylestown, Pa. Cross Country Bank, also based in Wilmington, was founded by Applied Card Systems in 1996. The bank specializes in the national marketing and distribution of secured credit cards, targeted at individuals whose credit rating is not good enough to qualify for credit cards from most banks. The two companies service more than 2.5 million cardholders and claim to be among the nation’s top 30 issuers of credit cards, according to Finkelman. “They advertise that they help you build your credit,” she says, “but with their fees and late charges, they end up doing just the opposite.” Representatives of Applied Card Systems and Cross Country Bank failed to return phone calls from the Daily Business Review. Mark Ferrulo, director of the Florida Public Interest Research Group, a consumer watchdog in Tallahassee, says that anti-consumer practices by credit card banks, like those alleged in the lawsuit, have worsened as more daily activities require a credit card. “People find themselves forced into outrageous late fees hidden away in the mouse print at the bottom of their contracts,” he says. “And their poor credit rating often results from the anti-consumer practices of the credit card companies themselves.” Officials of the Florida Department of Banking and Finance say they have received consumer complaints about Cross Country and have referred them to Delaware bank regulators. Delaware officials declined comment on the bank’s status and activities. Applied Card Systems has about 4,000 employers nationally, with major processing centers in Delaware, Kentucky and West Virginia. Assisted by government subsidies, it moved into a 300,000-square-foot office in the Blue Lake Corporate Center in Boca Raton, Fla., in 1997. State and county leaders approved nearly $900,000 in incentives for the 1,000 jobs the company brought initially, and $2.5 million in incentives for a 1999 expansion that doubled the firm’s work force. It’s expected that the company soon may employ up to 2,500 workers at the Boca Raton facility.

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