December 29, 2000
Providian Financial has agreed to pay $105 million to settle a cluster of class-action suits that accused it of unlawful business practices in its sale of such add-on products as credit protection and credit-line increases to its credit card customers.

Providian • Advance Fees • Credit Repair • Destinations Unlimited • Disputed Charges • Interest Rates • Late Posting • Late Refunds • Late Statements • Promotional Rates • Credit Protection • Unauthorized Balance Transfers --- News • WaMu Buys Providian • $300 Million Providian Settlement • Providian Chairman Out, Stock Tanks • Providian Settles Class-Action Suits

The proposed settlement covers dozens of suits against Providian since mid-1999. It follows nine months of mediation.

Attorney Robert Green said Providian's "aggressive" sales tactics for such products as price-protection plans often confused consumers and led them to agree to services they did not want and did not know how to use.

Up to three million customers could be eligible for reimbursemenets under the settlement. The company said customers would receive information about the settlement by the spring of 2001, assuming it receives court approval.

While Providian did not admit any wrongdoing in the settlement plan, it did issue a statement saying it hopes its many consumer disputes are history and pledged to cleaning up its marketing and customer service procedures.

It's not the first time Providian has seen the inside of the courtroom. In June 2000 the company agreed to repay consumers $300 million in a lawsuit filed by the San Francisco District Attorney and an administrative action by the Office of the Comptroller of the Currency (story).