Feds accuse CompuCredit of deceiving customers

— -- In one of the largest actions of its kind, federal regulators are seeking to recover an estimated $217 million in restitution and fines from credit card companies that officials say deceived subprime customers and left some of them deeper in debt.

Hundreds of thousands of subprime consumers across the nation could be eligible for reimbursement for credit card fees if money is recouped under these complaints, the agencies say.

The actions are the latest assault by regulators against aggressive credit card lending. The Federal Reserve recently proposed rules that would crack down on "unfair and deceptive" credit card practices. Meanwhile, state officials, such as New York Attorney General Andrew Cuomo, have investigated card offers sent to borrowers with spotty credit.

The FTC filed lawsuit Tuesday in the U.S. District Court for the Northern District of Georgia, alleging that CompuCredit "misled" consumers in marketing a credit card with a $300 credit limit. Borrowers were hit with up to $185 in upfront fees that reduced their available credit to as little as $115, the FTC says. The FDIC, in an enforcement action, levied similar charges against CompuCredit and its partner banks.

Regulators say that CompuCredit and its debt-collection unit, Jefferson Capital, also encouraged consumers with bad debt that lenders had written off to sign up for a new Visa credit card. When consumers did, they were instead enrolled in a debt-repayment plan and couldn't get the card until they paid off 25% to 50% of their debt, according to the complaints.