Roberts v. Fleet Bank - Other Text in Credit Card Solicitation Letter Can Influence Whether Disclosures in Schumer Box Meet TILA Requirements

Reversing a summary judgment for defendant, the Third Circuit found material questions of fact existed as to whether a bank’s credit card solicitation materials failed to disclose clearly the annual percentage rate. Defendant sent plaintiff a credit card solicitation offering a 7.99 annual percentage rate. The offer said that the rate was not introductory or temporary. The solicitation’s “Schumer box” (Truth in Lending Act (TILA) disclosures) said that the rate could change if the cardholder failed to meet repayment requirements or upon closure of the account. The cardholder agreement that plaintiff received next reserved the right to change the terms of the agreement at any time. Thirteen months later defendant raised the annual percentage rate. Plaintiff filed a class action, charging violation of TILA and Rhode Island’s consumer protection act, breach of contract, and unjust enrichment. The Third Circuit found that a consumer could reasonably conclude from the Schumer box that the annual percentage rate could change only due to nonpayment or closure. While TILA applied only to required disclosures in the Schumer box, the court found that the solicitation letter’s text could be considered in determining whether TILA-required information was clearly disclosed. The Third Circuit upheld the district court’s ruling that the transaction was exempt from the state consumer protection act; the contract was not breached; and no unjust enrichment claim could stand since the parties’ relationship was governed by the contract.