Deceptive Kohl’s Credit Card Fees Prompt Consumer Class Action

Kohl’s has been hit with a proposed class action in Pennsylvania that accuses the retailer of charging unwitting customers additional Kohl’s credit card fees for payment protection services that are essentially useless, according to court documents.

The complaint was also brought against Capital One Financial Corp., which oversees the credit card program with Kohl’s and shares in the revenue the program generates.

Kohl’s and Capital One entered into an agreement in 2010 to offer private-label cards, the Kohl’s credit card fees lawsuit said. The deal includes a profit-sharing agreement for the ancillary credit card products and fees that include Kohl’s Account Ease, the complaint said.

Kohl’s Credit Card Fees Allegations

The plaintiffs allege that the companies violated consumer protection laws by charging their credit card accounts with unauthorized “Account Protection” and “PrivacyGuard” fees, collectively known as Kohl’s Account Ease.

Plaintiffs Jennifer Gordon, Valerie Tantlinger, and Jennifer Underwood leading the proposed Kohl’s credit card fees class action lawsuit against the retailer and Capital One Financial seek to represent a nationwide class of Kohl’s customers who were forced into the Kohl’s Account Ease payment protection and credit monitoring programs.

Payment protection, also called debt protection or debt cancellation, is an insurance-like program sold by credit card issuers. It is supposed to cover your monthly card payment in hard times, such as job loss, or even wipe out your balance.

According to the complaint, Kohl’s has enrolled customers in its payment protection services “without their express permission, express informed consent or express agreement.”

Known in the credit card industry as “slamming,” this illegal practice involves enrolling new credit card applicants for credit monitoring or default protection services without first obtaining the customer’s consent.

As explained in the Kohl’s credit card fees lawsuit, Kohl’s Account Ease and PrivacyGuard Plan purports to cancel a customer’s account balance in the event the cardholder is laid off or hospitalized.

The retailer allegedly charged monthly Kohl’s credit card fees of $1.60 per $100 of a customers’ monthly balance. The lawsuit alleges that the payment protection service provided is deceptive since it offers “little or no value to consumers, many of whom are not even eligible for its purported benefits.”

“They don’t offer it to new cardholders,” stated plaintiffs’ attorney, Angela Edwards. “But that certainly didn’t stop them from continuing to bill people who didn’t even sign up for it.”

The lawsuit says Kohl’s marketing of its credit card “conceals” the fact that these services are optional and are not required to activate their account. The terms and conditions of the payment protection product “do not appear” on Kohl’s or Capital One’s websites, the Kohl’s credit card fees lawsuit said.

Additionally, restrictions in the program’s fine print mean the plaintiffs were never eligible to make a claim on the program — had they even known she was enrolled in it, Edwards stated. The lawsuit seeks an injunction to halt Kohl’s credit card fees that are still being billed to cardholders.

In an update on the litigation, a Philadelphia federal judge has given the green light for the class action to proceed. U.S. District Judge Wendy Beetlestone ruled that the consumers had sufficiently alleged unjust enrichment and breach of a duty of good faith, though she limited their claims to charges imposed after February 2012.

The Kohl’s Credit Card Fees Class Action Lawsuit is Jennifer Gordon et al. v. Kohl’s Corporation et al., Case No. 15-CV-730, filed in the U.S. District Court for the Eastern District of Pennsylvania.

UPDATE: On March 12, 2019, a $1.8 million settlement was proposed to resolve claims that Kohl’s and Capital One deceptively charged consumers for credit monitoring.

Join a Free Kohl’s Credit Card Fees Class Action Lawsuit Investigation

If you were billed for Kohl’s Account Ease and/or PrivacyGuard on your Kohl’s credit card from February 2011 until the present, you may qualify to participate in this class action lawsuit investigation. Get help now by filling out the form on this page for a FREE case evaluation.

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