Business 8th Edition by Marianne Jennings

Exercise 26

In late 1999, Paula Rossman received a "Pre- Qualified Invitation" to obtain a credit card from defendant Fleet Bank. The solicitation was for a "Fleet Platinum MasterCard" with a low annual percentage rate and "no annual fee." If interested, the recipient of this offer was to check a box next to which was written, "YES! I want the top card for genuine value and superior savings, the no-annual-fee Platinum MasterCard." An asterisk directed the recipient to a note that stated, "See the TERMS OF PREQUALIFIED OFFER and CONSUMER INFORMATION for detailed rate and other information."
The enclosure entitled "Consumer Information" contained the Schumer Box, the table of basic credit card information required under the Truth in Lending Act, 15 U.S.C. § 1601 et seq., as amended by the Fair Credit and Charge Card Disclosure Act of 1988. Within the Schumer Box was a column with the heading "Annual Fee"; the box beneath that heading contained only the word "None." On the "Consumer Information" enclosure, but outside the Schumer Box, Fleet listed other fees. Also in that location was the statement, "We reserve the right to change the benefit features associated with your Card at any time."
Ms. Rossman responded to Fleet's offer, and soon thereafter received her "no-annual-fee Platinum MasterCard." Along with the card, Ms. Rossman was sent Fleet's "Cardholder Agreement," which contained the following provision concerning annual fees: "No annual membership fee will be charged to your Account."
The agreement provided for various applicable annual percentage rates charged on outstanding balances, including the standard rate for purchases (7.99%) and several higher rates that could be triggered by certain acts or omissions on the part of the cardholder. Among these was a rate of 24.99 percent that Fleet was entitled to impose "upon any closure of [the] Account." The Agreement also contained a change-in-terms provision, which stated:
We have the right to change any of the terms of this Agreement at any time. You will be given notice of a change as required by applicable law. Any change in terms governs your Account as of the effective date, and will, as permitted by law and at our option, apply both to transactions made on or after such date and to any outstanding Account balance.
In May 2000, Fleet sent a letter to Ms. Rossman announcing its intention to change the terms of the agreement.
Soon thereafter, Fleet notified Ms. Rossman that the annual fee would be imposed almost immediately:
We are modifying the terms of your Fleet Cardholder Agreement only to correct the timing of the annual membership fee previously disclosed. That fee will first be charged to your Account in your billing cycle that closes in July, 2000, and will be charged in that billing cycle each year thereafter.
A $35 fee was charged to Ms. Rossman's account by July 6, 2000, in accordance with the second letter. Ms. Rossman filed a class action suit against Fleet for violations of the TILA. The District Court dismissed the case. Ms. Rossman appealed. Should the case have been dismissed? [ Rossman v Fleet Bank Nat. Ass'n , 280 F.3d 384 (3d Cir., 2002)]