Lawsuit Expected to Save Cardholders Millions of Dollars in Finance Charges and Late Fees

Roxborough, Pomerance & Nye Files Class Action Lawsuit Against American Express For Unfair Business Practices

LOS ANGELES, CA, August 4, 2004—A class action lawsuit has been filed against American Express (AMEX) for unfair business practices, claiming that cardholders are denied the 20-day grace period to make payments as stipulated in their agreements, resulting in late payments and subsequent finance charges for many consumers.

In Pomerance v. American Express, Civil Case BC318328, the plaintiff alleges that AMEX intentionally delays mailing its monthly billing statements to account holders so that statements are not received until at least approximately one week after the billing period closes.

Furthermore, the fact that AMEX does not consider a payment made until it is received—rather than the postmark date that the payment is sent—provides account holders with even less time to make timely payments. These billing practices virtually deprive account holders of any meaningful grace period, forcing them to mail their payments almost immediately upon receipt of the billing statements in order to avoid a finance charge and/or a late fee.

“In essence, the 20-day grace period is illusory as most people have far less than that to pay the balance of their bills,” explains Drew Pomerance, a partner of Los Angeles based Roxborough, Pomerance & Nye LLP who filed the case on behalf of the plaintiff.

The lawsuit also claims that AMEX intentionally mails its billing statements in envelopes without postmarks to hide its delayed billing practices, making it impossible for cardholders to determine whether or not the delays are due to AMEX or the post office.

“We are seeking an injunction, requiring American Express to change its billing practices by sending out billing statements as soon as the billing period closes and to postmark its billing statement envelopes,” adds Pomerance. “Furthermore, the lawsuit seeks restitution for all cardholders who have been paying charges due to the company’s fraudulent billing practices.”

Pomerance estimates that hundreds of thousands of cardholders in California have been paying finance charges without real cause, and that restitution can reach millions of dollars for class members.

The lawsuit joins other class actions alleging a variety of wrongdoing in AMEX’s billing practices. In one case, Boehr v. American Express, the plaintiff alleges that when American Express receives a payment after 10 a.m. on the day it is due, the company does not post the payment until the next day, thereby incurring one day of finance charges on that account.

“Clearly, something should be done to correct American Express’ billing practices and protect consumers from paying out unnecessary fees,” concludes Pomerance.

Roxborough, Pomerance & Nye LLP (RPN) is a Los Angeles-based law firm providing expert legal counsel and representation to the business community. Established in 1996, the firm offers a broad range of legal services in all facets of civil litigation with its primary focus on business, insurance, employment, and wage and hour litigation. It is the first law firm in the country to specialize in and make new law when representing employers in workers’ compensation premium and dividend disputes with insurance carriers.

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