Mudge to hear motions Friday in Visa class action

Amelia Flood Jun. 20, 2011, 9:00am


Madison County Circuit Judge William Mudge is set to hear motions Friday in a 2010 class action originally filed against Visa, Inc. and a Bethalto credit union.

Mudge will hear the motions in the case filed by proposed lead plaintiffs Gene and Karen Rhodes at 9 a.m.

The Rhodeses claim that Visa GiftCards they purchased through 1st MidAmerica Credit Union, formerly known as Olin Community Credit Union, already had diminished values due to monthly administrative fees that were deducted from the cards by Visa before the cards were purchased.

Karen Rhodes claims that when she bought such a card for her father-in-law, Gene Rhodes in November 2007, the $50 card was literally only worth $35 in actual cash value due to the prior, undisclosed deductions.

The class, if certified, would include all holders of Visa GiftCards issued by Services or Olin Community Credit Unions which lost value prior to the expiration of their "Valid Thru" date and a sub-class of holders of cards issued by either credit union that were pre-activated and had less than the value of the purchase price due to the pre-sale deductions.

The class action complaint claims the amount in controversy is more than $5 million.

The plaintiffs are suing on claims of violations of the Illinois Consumer Fraud and Deceptive Business Practices Act and unjust enrichment.

An amended complaint added Services Credit Union and dropped Visa Inc. from the defendants' side of the aisle.

Services Credit Union filed to dismiss the first amended complaint May 31.

In that motion, the defendant claims the plaintiffs are "factually incorrect," in their claims that the monthly administrative fees at issue in the case were applied before the cards were sold.

Services also claims that the consumer fraud claims are barred by the statute of limitations and can't apply to the gift card bought by Karen Rhodes.

It also points to the back of the gift card which informs customers that $3 monthly fees will start to be deducted from the cards seven months after activation.

1st MidAmerica also cites the statute of limitations and asks the court to dismiss the suit on the grounds that DuPage County Circuit Court or the United States District Court for the Northern District of Illinois are the proper venues for the dispute as part of its affirmative defenses.

Mark Goldenberg represents the plaintiffs and proposed class.

Mark Bauman represents Services Credit Union.

Mitten Nelson represents 1st MidAmerica.

The case is Madison case number 10-L-1155.

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