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Providian Eases Credit Payment Deadlines

Consumers: Move comes in wake of probe by San Francisco D.A.'s office of card provider's policies.

May 28, 1999|From Bloomberg News

SAN FRANCISCO — Providian Financial Corp., the biggest U.S. issuer of credit cards to consumers with tarnished credit, eased the payment deadlines that had helped prompt an investigation by the San Francisco district attorney's office, sending its shares up as much as 10% Thursday.

San Francisco-based Providian said it will wait an extra two days to receive monthly payments before charging customers late fees. It also will refund late fees to customers who believe they were wrongly charged and refund the cost of credit insurance to customers who believe they were misled.

Consumer advocacy groups in the San Francisco area had heard complaints about these policies as well as allegedly deceptive credit card solicitations and interest rates being changed without notice.

Shares in Providian rose $6.63 to close at $90 on the New York Stock Exchange. The stock had declined 33% in the previous six trading days after the San Francisco district attorney's office said it would investigate Providian for possible consumer fraud after receiving numerous complaints from consumers.

The company was also sued Friday by a consumer who alleged its advertising was misleading in claiming to offer help in rebuilding a customer's credit history.

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