Credit Card Late Fees Violate Constitution, 9th Circ. Hears

Law360, San Francisco (February 11, 2013, 7:34 PM EST) -- Bank of America Corp. and other major banks violate constitutional limits when they charge credit card customers large penalties for paying their balances late because those penalties constitute improper punitive damages, an attorney seeking to revive a consumer class action argued Monday before the Ninth Circuit.

The U.S. Supreme Court's ruling in State Farm v. Campbell, which said punitive damages should not exceed four times actual damages, should apply to the $39 fee banks charge customers who pay their credit card balances after the due date,...
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