Americans with shaky credit have been good to Rocco Abessinio. His privately owned bank has earned half a billion dollars in eight years of providing credit cards to people who couldn't get one elsewhere, either because of past bankruptcies, loan delinquencies or simply inadequate income.

Now Mr. Abessinio is in a fight with government authorities over how he treats his customers. Attorneys general of a half-dozen states have filed civil suits alleging that his business misled customers about terms and fees or engaged in abusive collection practices. Unlike many bankers accused of wrongdoing who settle quietly, the combative Mr. Abessinio has punched back, denouncing his critics and in one state making his fight a political matter.

Truck driver Charles Berry of MacArthur, W.Va. -- behind in paying his credit-card balance -- authorized Mr. Abessinio's collection arm to withdraw some cash from his bank account to make a payment. But then collection agents made three more electronic withdrawals without his knowledge, Mr. Berry later said in a sworn statement, which is part of the West Virginia attorney general's suit against Mr. Abessinio, his bank and its collection affiliate. Mr. Berry -- whose wife, Tedda, also was behind in paying on her credit card from Mr. Abessinio's Cross Country Bank -- said collectors started calling four or five times a day.

Mr. Abessinio's company says that it didn't call as frequently as Mr. Berry claims, and has no record he ever complained about unauthorized withdrawals. Former employees who've described abusive collection practices "lied," Mr. Abessinio said in an interview, "and we know that a lot of these customers lie."

In West Virginia, rather than accede to the state's terms for a settlement, his collection firm announced it would shut down a center that employs more than 550 people in a job-hungry community. This fall, with the attorney general in a re-election campaign, the dispute turned into a political football. The collection firm paid to bus employees to the capital for a rally where the attorney general was criticized, and an election foe seized on the issue to label him antibusiness.

State officials "are attempting to extort us," Mr. Abessinio told a radio interviewer in October.

The banker's battle opens a window into "deep subprime" credit-card lending, the business of offering cards to people with abysmal credit scores. This is the low end of a "subprime" universe of about 40 million consumers. At the end of last year, according to data firm CardWeb.com, the bank had $1.5 billion in credit outstanding to two million cardholders.

More than one-fifth of its borrowers ultimately default, Mr. Abessinio says, compared with 2% to 5% of prime customers of other card issuers. "We have to charge accordingly," he says.

His bank's annual interest rate on balances starts at a lofty 23.99%. Many new customers, such as the Berrys, are charged an upfront $100 fee. Combined with the first year's $50 annual fee, this becomes an immediate $150 card balance counting against the initial credit limit, which is often around $500.

Other fees can mount quickly. When the Berrys fell behind on paying and exceeded their limits, they said, each had $60 in late fees and over-limit fees tacked on each month. Collection agents say that when accounts are charged off as a loss, more than half of the balance sometimes stems from fees and interest rather than from purchases.

Mr. Abessinio said that while people with poor credit are vulnerable to scams, he runs "a good, clean company." Told that the Federal Trade Commission says it has received more than 5,000 customer complaints against his bank and its collection affiliate, Applied Card Systems, he said the figure is too high and must include mere inquiries. In August, Applied Card Systems settled FTC allegations of abusive practices -- neither admitting nor denying the practices but agreeing to avoid them.

And in Albany, N.Y., a state judge ruled in May that the state attorney general had established that Mr. Abessinio's companies engaged in "repeated and persistent fraudulent, illegal and deceptive practices." Mr. Abessinio plans to appeal the civil-suit summary judgment.

Mr. Abessinio got into the credit-card business by running card operations for various small banks. He later set up a business to handle back-office card operations and tailored programs for customers with poor credit. Then, finding that many banks balked at the risk involved in serving these customers, he formed his own bank in 1996 to do so.

His Cross Country Bank, based in Wilmington, Del., pitched its credit cards in part as a way for customers to re-establish a good payment history. His Applied Card Systems, which also handles other card-servicing operations, opened phone collection centers in West Virginia and several other states, where dozens of collectors sitting in office cubicles spend their days phoning delinquent cardholders around the country.

A patchwork of state laws governs bill collection. West Virginia bars practices such as phoning borrowers at inconvenient times, repeatedly calling back or disclosing a debt to neighbors or employers. Applied Card Systems has written rules, but they were often ignored, according to some former employees at a collection center in Beckley, W.Va., who went to the state attorney general after the center closed in mid-2003.

Kevin Stanley, who was a supervisor in Beckley, said in a sworn statement that he would call customers up to eight times in a day "to get a point across." If a child answered and he could hear a parent telling the child not to say he was home, Mr. Stanley said, he had another strategy. "We would tell that child, 'Don't listen to him. We know he's there. Don't lie for your dad,' " he said in his sworn statement. "Or, 'Don't end up like your parents when you grow up.' " Mr. Stanley says he was fired in 2002 for misrepresenting the amount of time he spent on telephone collection, using a technique that he claims a supervisor had advised him to use.

Employees described heavy pressure to collect, imposed by a system in which the bonuses of supervisors and collectors were pegged to the payments they brought in. Collectors routinely "made derogatory statements" to cardholders, said former collector Rose Duncan in an affidavit filed in West Virginia state court.

"I have told cardholders that they are thieves who steal the bank's money, that they should get a job, that they are useless, that they are bums, that they needed to quit sponging off everybody, and that they were liars," Ms. Duncan said. "I overheard other collectors telling cardholders to donate plasma, go out into parking lots of malls and pick up pennies, or pick up cans" to earn the money to pay.

Tammy Bosold, also at Beckley, described calling cardholders at work. "I'd tell them that if they didn't pay me, then everybody they worked with was going to know that a bill collector was calling them," she said in a sworn statement. When hung up on, she said, she would call back on the main line and have the person paged. However, Applied Card Systems later restricted calling cardholders at work, she added.

Said Ms. Duncan: "We were instructed not to sympathize with any cardholder who began crying."

Cross Country says Ms. Duncan was fired for processing two unauthorized phone payments and misrepresenting herself as a third- party agency. Ms. Duncan said she didn't do either thing, but, on the contrary, got into trouble for complaining about unauthorized withdrawals by the collection center.

The most serious allegation, made in suits by several states' attorneys general, is that collectors at times reached into debtors' bank accounts and withdrew money without their explicit approval.

Once a client had allowed one withdrawal, collectors had the bank data needed for such electronic transfers. Later, say the sworn statements of several collectors, employees would inform the customers they intended to withdraw funds for another payment, without asking directly for permission. Roberta Stone, who was a manager in the Beckley center, said she told customers they had to call back if they wanted to cancel the planned payment. She said this practice led to a surge in complaints of unauthorized withdrawals. Ms. Stone was fired for violating company computer policies.

Ms. Bosold said her technique was to talk very fast. She said she would say something like, "This is Tammy with Cross Country Bank. I see we have your information with National City. We'll process this payment for $75. Do you have any questions? Thank you. Bye."

Mr. Abessinio said he didn't tolerate unauthorized withdrawals or other abuses, and fired anyone who mistreated customers. If a customer complained of an unauthorized withdrawal, he said, the payment was quickly reversed.

In a court filing in Minnesota -- whose attorney general alleges Mr. Abessinio's business misled, deceived and harassed cardholders -- the bank and the collection firm said the state had evidence only "of isolated misconduct by rogue employees at a single since-closed" facility, a reference to Beckley. This conduct "resulted in the termination for cause of a number of the state's 'star' witnesses," the filing said.

Other witnesses, the filing added, "have no credibility whatsoever" because they didn't resign in protest or complain to the government while still employed. Asked in an interview about former employees who described abusive collections, Mr. Abessinio said, "Every one of these people lied."

He has collected sworn statements from other ex-employees who said abusive practices weren't condoned, and from industry consultants who said its current marketing and collection practices are lawful. Some ex-employees who told of unauthorized electronic withdrawals said the business cracked down on these and other abuses in mid-2002.

In 2003, Mr. Abessinio's businesses faced civil suits alleging deceptive or abusive practices from attorneys general of several states: New York, Wisconsin, Texas, Pennsylvania, Minnesota and West Virginia. Mr. Abessinio struck settlements with attorneys general in New Hampshire and Florida. "The things we agreed to stop doing are things that we don't do anyway," he says.

But in West Virginia, settlement talks turned rocky, as the bank's collection affiliate said it would close its Huntington office unless the case was settled. The collection affiliate took out full-page ads in West Virginia newspapers saying it would close the office in 2005, blaming the attorney general's refusal to settle.

The state attorney general said a settlement would require a promise to keep the office open and a penalty of at least $2 million. A lawyer for Mr. Abessinio's bank and collection firm said they wouldn't pay more than the $250,000 paid in Florida, where the bank has 15 times as many cardholders.

Why not just pay the $2 million? It would seem affordable for a bank that has earned a net $559 million over eight years. "It seems like a pittance, but we're talking about other attorneys general as well," Mr. Abessinio says. "What are they going to expect?"

This fall, with the West Virginia attorney general, Darrell McGraw Jr., facing re-election, Mr. Abessinio turned up the heat. On Oct. 8, buses paid for by his collection firm brought about 300 employees and supporters to a rally in Charleston, where there were calls for Mr. McGraw's defeat. His opponent, Republican Hiram Lewis, appeared at the rally and called his foe "antibusiness." A Cross Country executive, Paul Seitz, says employees were told that rally attendance was "completely voluntary."

Says Mr. McGraw: "These people don't want to provide restitution -- what they want is a token levy against them. What they want is the fruits of their evil-doing." On Tuesday, Mr. McGraw was narrowly re- elected.

Mr. Abessinio's business has felt a crimp from all this. The pressure has included a tougher capital requirement imposed by the Federal Deposit Insurance Corp. on Cross Country Bank. The FDIC said in 2002 it "had reason to believe that the bank had engaged in unsafe or unsound banking practices, and had committed violations or law and/or regulations." It wasn't more specific. Without admitting or denying any infraction, the bank agreed not to engage in "hazardous" lending or operate with a large volume of "poor quality loans" or "inadequate capital."

To boost capital, Mr. Abessinio says, his bank had to raise prices and lose some accounts, and his employment has fallen to about 1,500 from 4,000 three years ago. "We shrunk, and the powers that be seem to want us to shrink further," he said. "We're hoping we can survive through the low point of this cycle."