## Facts

- Fleet mailed Paula Rossman a “pre-qualified” credit-card solicitation advertising a “Fleet Platinum MasterCard” with “no annual fee.”
- The solicitation directed consumers to a “Consumer Information” disclosure containing a TILA-required Schumer box.
- In the Schumer box, the “Annual Fee” line stated “None.”
- Outside the Schumer box, the materials included a general statement reserving Fleet’s right to change “benefit features” associated with the card.
- Rossman accepted the offer and received the card, accompanied by a cardholder agreement stating there was no annual fee but allowing Fleet to change terms.
- Within a few months, Fleet notified Rossman it would begin charging an annual fee on the account.
- Rossman alleged Fleet used “no annual fee” marketing to induce applications while planning to impose an annual fee shortly after account opening.

## Issues

1. Whether a credit-card solicitation complies with TILA and Regulation Z when it advertises “no annual fee” and discloses “None” for annual fee in the Schumer box, but the issuer later imposes an annual fee shortly after the account is opened.
2. Whether a generic reservation-of-rights clause outside the Schumer box defeats, at the pleading stage, a claim that the “no annual fee” disclosure was materially misleading.

## Decision

- The Third Circuit reversed the district court’s Rule 12(b)(6) dismissal of the TILA claim and remanded.
- The court held the complaint plausibly alleged that the “no annual fee” solicitation and Schumer-box disclosure of “None” could reasonably be understood by an ordinary consumer as meaning the account would not carry an annual fee, not merely that no fee was charged at the moment of solicitation.
- The court held the general reservation-of-rights language did not, as a matter of law, negate the possibility that the annual-fee disclosure was misleading.

## Legal Principles

- TILA and Regulation Z require clear and conspicuous disclosure of key credit terms in card solicitations, including annual fees, typically through the Schumer box.
- TILA disclosure adequacy is assessed from the viewpoint of an ordinary consumer; technically literal accuracy does not preclude liability if the disclosure is materially misleading in context.
- A Schumer-box entry stating “None” for “Annual Fee,” paired with prominent “no annual fee” advertising, can imply an ongoing account term rather than a temporary or momentary condition.
- General change-in-terms or “benefit features” reservations outside the Schumer box do not automatically cure or override potentially misleading fee disclosures, at least at the motion-to-dismiss stage.
- On a Rule 12(b)(6) motion, allegations and reasonable inferences favor the plaintiff; the question is plausibility, not ultimate liability.

## Conclusion

The Third Circuit held that Rossman plausibly stated a TILA claim because an ordinary consumer could read Fleet’s “no annual fee” solicitation and Schumer-box disclosure of “None” as representing the account would not have an annual fee, and a general reservation-of-rights clause did not require dismissal despite Fleet’s later imposition of an annual fee.


Rossman v. Fleet Bank (R.I.) Nat’l Ass’n, 280 F.3d 384 (3d Cir. 2002)