AGREEMENT CURBS DECEPTIVE TELEMARKETING
APPEALS TO FIRST USA BANK CUSTOMERS
Settlement Requires Bank to Monitor Promotions by Its Business Partners

Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division, along with those of 27 other states and Puerto Rico, entered into an agreement with credit card issuer First USA Bank, now known as Bank One Delaware, to reform the way products are marketed to its customers by telemarketing firms.
For many years, First USA has contracted with telemarketing firms that sell a variety of products and services to bank customers. In exchange for providing its customer lists, First USA receives a percentage of the sales by these companies.

The states raised concerns that the marketing practices of First USA's business partners were deceptive and often resulted in consumers being charged for products and services–such as discount buying clubs, roadside assistance, credit card loss protection and dental plans–that they had no idea they agreed to purchase.

Many solicitations relied on free trial offers that failed to adequately disclose that it was the responsibility of the consumer to cancel during a trial period. Making matters worse, because individuals were not asked to provide their credit card information directly to the vendor, many consumers did not understand that their credit cards would be charged once the free trial period expired.

"First USA profits by sharing information about its customers with telemarketers," Curran said. "This settlement requires it to ensure that telemarketers using its customer lists do not engage in deceptive practices."

The settlement agreement requires First USA/Bank One to include consumer protection policies in its contracts with telemarketing firms. These reforms will:

• Prohibit deceptive solicitations;
• Require the bank to review and approve all scripts and marketing materials to ensure they comply with the agreement;
• Require telemarketing firms to comply with all applicable consumer protection laws;
• Prohibit customer charges unless there is express authorization of the account holder; and
• Require clear and conspicuous disclosure of the identity of the telemarketing company if the script makes reference to the bank.

First USA also is required to resolve any complaints from card holders who indicate that a charge is unauthorized. First USA agreed to pay the states a total of $1.3 million, of which Maryland will receive $26,041 for consumer education.

Joining Maryland in the agreement with First USA are: Arizona, California, Colorado, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Texas, Vermont, Washington and Wisconsin.

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