Credit Cardholder Files Consumer Protection Lawsuit Against Metris and Direct Merchants Bank for Alleged Deceptive and Unlawful Business Practices

Business Wire, May 24, 2000

Business Editors/Legal Writers

MINNEAPOLIS--(BUSINESS WIRE)--May 24, 2000

The law firms of Lieff, Cabraser, Heimann & Bernstein, L.L.P., and Zimmerman Reed P.L.L.P, announce the filing today of Fischl v. Metris Companies and Direct Merchants Credit Card Bank, N.A., Case No. 00-7129, a consumer protection lawsuit against Direct Merchants Credit Card Bank, N.A., and its parent company Metris Companies Inc. (NYSE:MXT), for allegedly engaging in widespread deceptive and unlawful business practices.

Direct Merchants Bank, the nation's ninth largest MasterCard issuer, has over 3.8 million credit cardholders, and is one of the fastest growing credit card companies in the United States. Metris Companies has stated as its goal "to maximize the profitability of each (Direct Merchants Bank) customer relationship." Plaintiff Gerald Fischl, a Direct Merchants Bank cardholder residing in California, alleges that Direct Merchants Bank's growth has been, in part, attributable to a series of overly-aggressive, sharp, and unlawful business practices that have harmed cardholders nationwide. Among the misconduct Plaintiff alleges is that Direct Merchants Bank:

--  routinely assesses fees for the purchase of fee-based services,
    such as its PurchaseShield program, that cardholders did not
    authorize;

--  repeatedly charges late payment fees and interest for cardholder
    payments that are not in fact late or delayed;

--  makes solicitations in connection with checks issued to
    cardholders that are misleading and do not disclose the true value
    of the checks issued to cardholders; and

--  regularly promises a lower interest rate in connection with
    balance transfers, convenience checks and cash advances than the
    interest rate that the cardholder receives.

Plaintiff filed individually and on behalf of all Direct Merchants Bank cardholders nationwide from January 1, 1998 to the present. The class action complaint was filed in Minnesota state court, Hennepin County, where Metris Companies is based, and alleges violations of Minnesota's Consumer Fraud Act and Deceptive Trade Practices Act. Plaintiff seeks an order certifying a nationwide class of Direct Merchants Bank cardholders, an order awarding Plaintiff and the Class restitution and/or disgorgement of ill-gotten profits, and an injunction against Direct Merchants Bank for its alleged deceptive and unlawful business practices.

Commenting on the lawsuit, Elizabeth Cabraser stated, "Direct Merchants Bank claims that its products and services offers cardholders the freedom and opportunity to achieve their financial goals. Unfortunately, as alleged in the complaint, many are subjected to misleading solicitations and unlawful business practices, such as charges for services that offer illusory benefits and fail to improve their credit records. Our goal is to persuade the company to correct its practices."

If you are a Direct Merchants Bank cardholder and wish to discuss this case, or have any other questions about your rights as a consumer, please send an email to or contact attorney Stephen Cassidy of Lieff, Cabraser at 415/956-1000, or attorneys Jennifer Sustacek or Keelyn Friesen of Zimmerman Reed at 612/341-0400. For press inquiries only, please contact Elizabeth Cabraser at 415/956-1000, or Jennifer Sustacek or Keelyn Friesen of Zimmerman Reed at 612/341-0400.

About Lieff, Cabraser, Heimann & Bernstein

We are a national law firm with offices in San Francisco, California and New York, New York that represents plaintiffs in class and group actions nationwide. Typical of our firm's practice are cases involving dangerous or defective products, consumer fraud, employment discrimination, environmental torts, securities and investment fraud, and antitrust violations. Please visit it us on the Internet at www.lchb.com.

About Zimmerman Reed

Zimmerman Reed, P.L.L.P. is a national law firm with offices in Minneapolis, Minnesota and Phoenix, Arizona. The firm represents plaintiffs in complex class actions nationwide including, mass torts, food contamination, consumer fraud, and antitrust and human rights violations. For more information about Zimmerman Reed and our current cases, please visit our website at www.zimmreed.com.