AMEX May Soon Sing the Blues over its Blue Cash Card

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Washington, DCA class action lawsuit against American Express (AMEX) alleges that the terms outlined in the promotion of its American Express Blue Cash Card were misleading: The Blue Cash Card claimed that consumers could earn up to 5 percent cash back on purchases made with the card but the suit claims that that the terms outlined in the promotion were misleading, and that cash has not been returned as promised.

According to the suit, consumers did not receive the benefits that AMEX offered, namely between September 2003 and December 2006. If you had a Blue Cash Card during this time, read on…

Credit CardAMEX made another addition to its products in 1999 by introducing Blue, which fast became a popular card among young adults due to its aggressive marketing campaign. Blue had no annual fee, a rewards program, and a multi-functional onboard chip. In September 2003, a cashback version, "Blue Cash", quickly followed.

"Blue Cash", offered consumers the American Express Blue Cash Card, which was issued by the American Express Centurion Bank (AECB). AMEX, world renowned for its universally recognized name and logo, sent out millions of solicitations for Blue Cash touting it as a method by which cardholders would be rewarded for their spending by receiving a cash rebate and would earn up to 5 percent cash back.

In 2004, Mr. Homa of New Jersey obtained a Blue Cash Card and two years later he filed a complaint in New Jersey, claiming the actual terms of the rewards program were misrepresented and it failed to award him the promised amount of cash. Mr. Homa's complaint was seeking class action status, contending both American Express and its Centurion unit failed to award him the promised amount of cash, which was in violation of the New Jersey Consumer Fraud Act.

The Blue Cash card agreement included a section prohibiting consumers from bringing class actions against American Express in the event of a dispute. The agreement also mandated that any disputes arising from the agreement would be governed by Utah state law, which conveniently recognizes all class-action waivers in consumer credit agreements.

However, the court sided with Homa, citing a 2006 New Jersey Supreme Court decision holding that certain class action waiver provisions were unconscionable. The ruling by the New Jersey appeals court paved the way for a class action against AMEX.

The current class action lawsuit alleges that the AMEX literature and advertisements made customers believe that the more one spends, the more one benefits with a reward of cash back. It claims that AMEX intentionally and completely failed to advise its customers of all components of the offer and how the calculations of the cash rebate (a certain percentage) was going to be made. The suit further claims that AMEX failed to properly inform those same customers that there were additional restrictions to the Blue Cash program and consumers did not receive the benefits in accordance with the marketed offer.

If you used your American Express Company ("AMEX") Blue Cash credit card between September 2003 and December 2005 you may have a claim for failure to receive the full rebate promised by AMEX in connection with a putative class action against "AMEX" and ("AECB").

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