Court Urged to Revive Target Credit Card Class Action Lawsuit

Plaintiffs Richard Acosta and Jenifer Roman urged the U.S. Court of Appeals Seventh Circuit to revive a class action that accuses Target Corp. of sending unsolicited credit cards to people with low credit scores in violation of the Truth in Lending Act (TILA).

Plaintiffs in the Target credit card class action lawsuit allege that Target sent unsolicited Target Visa cards to more than 10 million past and current holders of the company’s Target Guest Cards between 2000 and 2007. The class action lawsuit claims the cards contained deceptive rate and credit limit information.

In urging to revive the Target credit card class action lawsuit, the plaintiffs reasoned that Congress has enacted an exception to TILA’s prohibition on sending unsolicited credit cards, allowing it only when there has been a change in a company’s “well established mutually satisfactory” relationship with the consumer that would require a new card.

The plaintiffs, however, said that Target has admitted that “programs were done at times of Target’s choosing and not because some change to the TGC account had occurred, but because Target wanted to rekindle [or] re-engage the accountholder or find a better product for the active accountholder.”

According to the class action lawsuit, “This is all the proof the district court needed to find that Target was issuing unsolicited credit cards at the whim of the card issuer and for reasons other than accountholder convenience.”

The plaintiffs also allege that most of the consumers in the card substitution program were in bad financial situations, placing them in the highest annual percentage rate range. They also claimed that many of the offers failed to include the so-called “Schumer Box,” a summary of the costs of a credit card.

It should be noted that in 2009, the U.S. Court of Appeals upheld a lower court’s decision that Target did not violate the TILA on mailing unsolicited Target Visa cards to customers with Target guest cards. The ruling said that the individual who brought the class action lawsuit was not a proper class representative because she could only represent individuals who had received an unsolicited Target Visa but had no open Target cards at the time. Certification was denied because the court was unconvinced there were enough Class Members to warrant a class action lawsuit.

The plaintiffs are represented by David J. Piell.

The Target Visa Red Card Class Action Lawsuit is Richard Acosta, et al. v. Target Corporation, et al., Case No. 13-2706, in the U.S. Court of Appeals for the Seventh Circuit.

UPDATE: On March 19, the 7th U.S. Court of Appeals upheld the dismissal of the Target Visa class action lawsuit.