BEVERLY — A local judge and a Salem lawyer are taking on the multibillion-dollar credit card industry, calling the interest rates charged to one Beverly woman struggling to pay off two old credit card debts "unconscionable."
Former Salem District Court presiding Judge Robert Cornetta, who is now sitting by special assignment in Lawrence Superior Court, ruled earlier this month that Citibank's interest rates, which at some points soared to 54 percent, were "so outrageous" that they should not be enforced.
He ordered that the woman should not have to pay interest above 18 percent.
His ruling sets the stage for an appeal that Salem lawyer Richard Wise hopes will lead to changes in the credit card industry.
Wise, who represents the Beverly woman pro bono, believes Cornetta may be the first judge in Massachusetts to take a stand on the issue, and that while the ruling is not binding on other judges, it's likely to generate discussion and argument in other cases.
Underlying every basic contract, Wise said, is the understanding that it is being entered into in good faith and fair dealing.
But not when it comes to credit card companies.
"Have you ever tried to negotiate a credit card contract?" Wise said. "The terms or the interest rates?"
It's a one-sided exercise, he said, and one that's fundamentally unfair to consumers like his client.
Rosemary Walker DeCristoforo, who agreed to let her case be used as a test case, opened one of the credit cards in 1984 and opened a second card 10 years later, in 1994. Both of the cards are now issued by Citibank.
By 2009, the balance on the older card was more than $25,870 and on the 1994 card, $8,465. At one point, she was making more than $1,000 in payments each month to Citibank to try to pay down her debt.