A major issuer of credit cards to consumers with blemished credit has agreed to clean up its act. Direct Merchants Bank (also know as Metris Companies) is settling lawsuits filed in Minnesota, Arizona, and California by agreeing that all payments received by 5 p.m. Eastern time will be credited to the cardholder’s account the same day. In addition, for two years, the company will agree to give refunds to customers who wish to cancel purchases of various enhancement services, including credit protection, extended service plans and membership clubs. The lawsuits were filed in 2000 and 2001 and alleged that Direct Merchants Bank routinely assessed fees for the purchase of fee-based services which cardholders did not authorize and repeatedly charged late payment fees and interest for cardholder payments that were not in fact late or delayed. Under other terms of the settlement, Direct Merchants/Metris will pay approximately $5.5 million for plaintiff attorneys’ fees. The agreement will also enable former cardholders who apply and qualify for a new credit card to pay no annual fee and receive a 9.9% APR for one year. Metris will also offer to make a charitable contribution of $8 in their name or give them a choice of a coupon book good for discounts on a variety of goods and services or enrollment in a card registration or travel protection service. The agreement will cover all current and former cardholders who were issued credit cards from January 1, 1995 through February 1, 2002. For more information visit http://www.metriscompanies.com.