Nordstrom Hit With Class Action Over Credit Card Fees

A class action complaint filed on Mar. 2 alleges that clothing retailer Nordstrom violated federal law with the disclosure terms of its store credit card.

“Nordstrom failed to furnish account-opening disclosures with complete and accurate information on applicable account fees in the manner mandated by the statute and its implementing regulations,” the complaint claims.

Specifically, the Nordstrom credit card fee disclosure class action lawsuit alleges that Nordstrom, and the bank that issues its store credit card, do not properly disclose the methodology of its “returned payment fee,” which is the fee charged to a consumer if his or her payment is returned, such as a bounced check.

Plaintiff Ester Kelen claims that she received a credit card at the Nordstrom Rack store in New York, N.Y., in March of 2015. The terms and conditions provided with the card stated that the “returned payment fee” would be a flat “$25.”

The Nordstrom credit card fee disclosure class action lawsuit states that Nordstrom’s inaccurate disclosure violates the Truth-in-Lending Act (TILA). The purpose of TILA is to allow consumers to easily compare the key terms of different credit cards, and to protect consumers from unfair billings practices.

According to the complaint, the Bureau of Consumer Financial Protection sets the rules for credit card fees, and specifically that a returned payment fee cannot be more than the minimum payment due.

Therefore, Nordstrom’s “description in the account-opening disclosure table that the returned payment fee as simply ‘$25’ was inaccurate and did not conform to the Bureau’s guidance for disclosure when a range of fees up to $25 was possible.”

Kelen seeks to represent a Class of “all persons who received an account opening disclosure form with a tabular format and verbiage within the terms and conditions substantially similar to the account-opening disclosure form received by Plaintiff that disclosed the returned payment fee as simply $25.” Kelen seeks a court order stopping Nordstrom from making the inaccurate disclosure, as well as “up to $1,000,000 in statutory damages” for each violation of the federal act.

This is not the only potential class action lawsuit that Nordstrom has been involved with recently. In May of last year, a former employee of Nordstrom accused the company of firing him when he pointed out that some customers were being charged for online orders that were never shipped. And in December, Nordstrom and designer jeans company AG Adriano Goldschmied agreed to pay $4 million to settle a class action alleging that the companies falsely advertised the jeans as “Made in America” when they were not.

Plaintiff Ester Kelen is represented by Harley J. Schnall of the Law Office of Harley J. Schnall, and Brian L. Bromberg and Jonathan R. Miller of Bromberg Law Office, P.C.

The Nordstrom Credit Card Fee Disclosure Class Action Lawsuit is Ester Kelen v. Nordstrom Inc., et al., Case No. 1:16-CV-01617, in the U.S. District Court for the Southern District of New York.

UPDATE: On Dec. 16, 2016, a federal judge dismissed this class action lawsuit against retailer Nordstrom, finding that the plaintiff failed to allege a concrete injury that she can sue over.