San Diego Lawyer Ben Pavone went on the CBS Early Show and said sternly that he will not pay his Bank of America credit card bill because the bank suddenly raised his rate to 27.99 percent and cut his spending limit.
And Pavone said he will sue BofA if it puts a negative mark on his credit reports.
Pavone on national television said he has been a good customer for 13 years, always paying on time. Bank of America did not justify the interest rate hike, he said.
“Bank of America did not give an explanation,” he said. “I guess they will have to explain themselves in court.”
Pavone said banks are taking advantage of large spreads between what they charge credit card customers and the interest they get charged to borrow money from other banks – the interbank rates – which are at historic lows.
“The spread from 28 percent to what they’re paying, which is maybe a half percent to 1 percent, is simply opportunism,” Pavone said.
When Early Show Host Maggie Rodriguez asked Pavone if he felt intimidated by taking on a banking giant, he replied: “I usually represent consumers. I’m used to fighting underdog cases.”
Pavone said he sees many clients frustrated with credit card issuers that are raising rates arbitrarily. Next month, credit card reform laws are set to take effect that restricts how and when card issuers can raise rates.
But lawmakers and consumer groups have complained to the Federal Reserve, which has rule-making authority under the reform laws, that the card companies are finding loopholes and more stringent actions need to be taken.
“At the end of the day, the legal system is composed of people, judges, juries, and if they don’t have a good enough explanation, there’s always a legal avenue to find a way to seek justice,” Pavone said.
