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provided to cardholders. William F. Binns, petitioner's vice
president in charge of credit card services, answered telephone
and written inquiries objecting to the new fee. He told
cardholders that the card was a good value for $1.25 a month.
Petitioner projected that, as a result of imposing the
annual membership fee, it would lose 25 percent of its MasterCard
accounts, including most in the inactive group and many of the
convenience users. Although many closed their accounts, the
number who did so was less than petitioner had projected.
From 1983 to 1985, petitioner imposed the annual membership
fee at the start of each cardholder’s membership year.
Petitioner billed the fee on the first statement for that year.
From 1983 to 1985, petitioner typically charged cardholders
who incurred interest charges on their balances an 18-percent
annual percentage rate. Petitioner charged its Gold MasterCard
customers a lower rate and charged some of its non-Virginia
customers up to 21 percent. Petitioner considered its Gold
MasterCard customers to be lower risks even though they typically
carried higher monthly balances.
From 1983 to 1985, petitioner occasionally waived the first
year’s membership fee if the customer was a member of an affinity
group, waived the annual fee for the year in response to some
customer complaints, and waived the annual fee for some active
customers who threatened to leave. Otherwise, petitioner
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