Some good news for those bankruptcy filers who have fallen prey to the credit card companies targeting debtors mentioned on this blog.

As the North Country Gazette reports, First Premier Bank, who offers one of the worst subprime credit cards on the market, has come to terms with the New York State Attorney's office on a settlement of $4.6 million to be refunded to consumers who were deceived by its marketing and lending practices. The settlement amount includes $4.5 million in refunds and $105,000 in penalties and costs.

First Premier was cited as falsely promising customers that they were pre-approved for a credit card with a $2000 limit, 9.9 percent fixed APR and no processing fees for opening the account.  However, consumers who signed up for their cards found themselves hit with all kinds of fees, in addition to credit limits much lower than and interest rates much higher than those promised.

One consumer who filed a complaint to the Attorney General's Office experienced what is considered typical for First Premier and similar lending companies: he received a credit line of only $250, and before he could even use the cards, he was billed for fees that left him with less than $70 in credit on the card.

Many consumers who keep the cards complained that their balances rose astronomically due to hidden fees that appeared without warning on monthly bills.  Some of the fees that the Attorney General's Office found excessive: "account set-up and participation fees, annual fees, late fees, overlimit fees, credit limit increase fees as well as fees for paying online, accessing an account or additional card fees."

In the case of the "credit limit increase fees," for example, many such cards automatically increase the credit limit by $100 monthly, and charge $25 for this "convenience."

Under the settlement, First Premier is required to reform its billing practices and marketing of its credit cards.  For instance, they can no longer charge customers processing fees or other fees until they use their cards for a purchase or cash advance.  Also, they are no longer able to market their subprime cards as "Gold" or "Platinum" cards unless they also clearly specify the risks involved, and cannot promise "no processing fees" unless they remove the processing fees.