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A proposed $20 million class action settlement over allegations that ING Bank committed consumer fraud was given preliminary approval on Wednesday by a federal judge.
Plaintiffs Jonathan and Trude Yarger alleged in a January 2011 ING class action lawsuit that ING Direct Financial repeatedly failed to honor its “Rate Renew Guarantee,” which promised consumers could renew their interest rates on ING Easy Orange and ING Orange loans for a flat fee of $500 or $750 for the remainder of the lives of their loans.
According to the Yarger’s ING class action lawsuit “[t]he rate renew guarantee is extremely valuable because it allows borrowers to reset the interest rate on their mortgages at any time to take advantage of lower interest rates for a low, fixed cost, whereas resetting or refinancing most mortgages is expensive and potentially cost-prohibitive.” However, ING discretely changed the “flat-fee” promised, a difference of up to several thousands of dollar per rate renewal, and continually added qualification requirements not described in its advertising, the Yargers alleged.
Capital One, ING Direct’s successor, did not admit any liability in agreeing to the ING class action settlement. The bank instead cited concerns that the class action lawsuit would take years and a great deal of money and resources to resolve. According to settlement documents, $20 million will be provided by Capital One to borrowers. A formula will be used to determine the award to each consumer who had a loan. The formula considers the original principal balance, and the individual account price differential.
The May 7 order certified the following ING settlement Class: Those who obtained an Orange Mortgage or Easy Orange Mortgage from ING on or after Oct. 1, 2005, and on or before May 31, 2009; or obtained an Orange Mortgage from ING before Oct. 1, 2005, and performed a Rate Renewal of that mortgage on or after Oct. 1, 2005 and on or before May 31, 2009. However, the class excludes “any current or former legal representative, officer, director or employee of ING, the judge” in the ING class action lawsuit and members of the judge’s family.
Class Members of the ING Direct class action lawsuit settlement will be notified via email and mail, according to preliminary ING class action settlement documents. However, the settlement proposal will still need to be evaluated at a fairness hearing and requires final approval from the judge.
The lead plaintiffs are represented by Jonathan Selbin of Lieff Cabraser Heimann & Bernstein LLP, Matthew R. Wilson of Meyer Wilson Co. LPA, Jeffrey S. Goddess of Rosenthal Monhait & Goddess PA, Olsen Law Offices APC and Webb & Bordson APC.
The ING Direct Mortgage Class Action Lawsuit is Johnathan Yarger, et al. v. ING Bank FSB, Case No. 1:11-cv-00154 in the U.S. District Court for the District of Delaware.
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