First USA Proposes to Settle Fee Lawsuits

Bank One’s First USA unit has proposed paying $40 million to settle lawsuits alleging improper charges to its credit card customers. A class-action suit filed in U.S. District Court in East St. Louis, Mo., alleges that First USA--the nation’s largest issuer of Visa cards--hit cardholders with improper late fees and finance charges. The proposed settlement is outlined in a letter First USA sent to customers, although the company denies any wrongdoing and says it will “vigorously defend itself” if the plan is rejected. According to the letter, the settlement would affect only customers whose payments were handled in the Atlanta or Louisville, Ky., facilities of third-party vendor National Processing Co. between Jan. 1, 1998, and Aug. 31, 1999. The court has set a Jan. 24 hearing to decide whether to approve the settlement. Chicago-based Bank One closed unchanged at $37.69 on the NYSE.