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PENNSYLVANIA ATTORNEY GENERAL SUES DAUPHIN DEPOSIT OVER FEES ON IRA ACCOUNT

 HARRISBURG, Pa., Nov. 10 /PRNewswire/ -- Attorney General Ernie Preate Jr. today sued Dauphin Deposit Bank and Trust Co., charging that the bank broke a promise to consumers when it began imposing fees this year on an individual retirement account it marketed in the early 1980s.
 "We allege that depositors were promised there would be no fees and that the interest rate on their investments would never drop below 10 percent," Preate said. "By imposing these allegedly illegal fees, the bank has cut the effective annual interest rate below 10 percent."
 The suit asks the court to order the bank to refund fees paid by consumers and to pay civil penalties to the state.
 At issue, Preate said, is an 18-month variable rate IRA offered by Dauphin Deposit in 1982 and 1983 when interest rates were much higher and a 10 percent interest rate on savings was not unusual.
 The suit alleges that bank employees told prospective depositors directly and through written materials that there would never be any fees with the program and that the guaranteed minimum interest rate was 10 percent.
 About 5,000 consumers made deposits into the IRAs, according to the suit.
 The suit alleges that last December the bank notified depositors that it would begin charging certain fees Jan. 1. Specifically, the bank began charging one-half of 1 percent interest on 1,200 accounts of $35,000 or more. Excluded were accounts maintained in a previously established employer-sponsored, direct-deposit IRA program, the suit notes.
 In addition, all rollovers or transfers into the IRAs became subject to a 3 percent acceptance fee, according to the suit.
 The suit charges the bank with violating the state's Unfair Trade Practices and Consumer Protection Law.
 Preate said the suit was filed in Commonwealth Court by Deputy Attorney General Renardo L. Hicks, director of the Attorney General's Bureau of Consumer Protection, and Deputy Attorney General Joseph K. Goldberg, attorney-in-charge of the bureau's Harrisburg office.
 -0- 11/10/93
 /CONTACT: Jack J. Lewis, assistant press secretary of the Office of Attorney General, 717-787-5211, or at home, 717-657-9840/
 (DAPN)


CO: Pennsylvania Attorney General's Office; Dauphin Deposit Bank and
 Trust Co. ST: Pennsylvania IN: FIN SU:


MP -- PH028 -- 2900 11/10/93 16:02 EST
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Publication:PR Newswire
Date:Nov 10, 1993
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