Lawsuits filed in the U.S. against units of HSBC Holdings PLC charge that the lender's credit card payment-protection service defrauds disabled, retired and unemployed consumers, according to Bloomberg News.

Complaints filed July 2 against HSBC in federal courts in Philadelphia and Camden, N.J., say the service purports to safeguard accounts by suspending or canceling required minimum payments when customers become disabled or unemployed, but the circumstances that activate protection are "varied, complicated and always changing."

The service "is designed to prey on the financially insecure and is virtually worthless because of the numerous restrictions that are imposed," the complaints allege.

The complaints charge that the bank enrolls people before sending them small-print restrictions that are "incomplete, indecipherable, misleading and obfuscatory."

The plan, which costs $1.35 for every $100 of cardholders' balances at the end of each month, excludes the self-employed, part-time workers, retired people and those who are already unemployed or on disability, according to the lawsuits.

HSBC spokeswoman Kate Durham said the London financial company does not comment on legal matters.

The Camden complaint, brought by Marilyn Rizera in U.S. District Court for the District of New Jersey, said HSBC Bank USA Inc. and HSBC Card Services Inc. are violating the New Jersey Consumer Fraud Act and engaged in breach of contract.

The Philadelphia case, brought by Edward T. Esslinger, Gloria Glover and Adrath Rogers in U.S. District Court for the Eastern District of Pennsylvania, said the bank is violating the Pennsylvania Unfair Practices and Consumer Protection Law.

Both sets of plaintiffs seek to proceed with group lawsuits.




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