Archive for the ‘Credit Cards’ Category

Credit card default way up in 4th Q 2008

March 20, 2009

Defaults spiked in the fourth quarter reaching more than 6%.  As posted in creditslip, the credit card companies have no one to blame for themselves.  They looked to bankruptcy reform to keep defaults low and that didn’t work out.  They extended credit to people who shouldn’t have gotten it after mortgage lender started to tighten credit back in 2006 and they have created all kinds of sneaky charges that give people reason to feel these companies are deceptive and not deserving of their hard-earned dollars.


Stolen credit card used for breast augmentation

March 6, 2009

Julianne Johnson of Bradenton Florida lives the high life; frequenting country clubs and high end spas.  She charms men into special friendship allowing her access to their credit card which she is accused of using illegally for purchases such as breast augmentation surgery.  I hope she claims the money she stole to pay for the surgery as a business expense so she can use it as a tax deduction.

Courtesy Taking Charge

Multi-state credit card scheme

February 24, 2009

Charles “Sho” Barksdale admitted his role in a prepaid card scheme that cost financial institutions between $1 million and $2 million.   This complicated scheme involved runners in various states who would go to bank tellers with prepaid cards with small amounts of cash and have the tellers call a number where a c0-conspirator posed as a card services representative and would walk the teller through the various numbers to press in order to make the transaction go through.

When Barskdale was arrested, he used coded language on a call with a female friend to have her “destroy a computer, withdraw funds from a bank account and remove expensive merchandise from a residence.”  Just like on TV!

Article courtesy “Taking Charge”

TD Bank sued for gift card dormancy fee

February 17, 2009

Toronto-Dominion Bank and related entities are being sued in New Jersey state court on a class action basis, for allegedly deceptive practices when they issue gift cards.  Despite the clear “Good Thru Date” stamp on the gift cards, the gift card agreement fine print allows the bank to charge a “dormancy”  fee if the card is used after a certain date but before the “Good Thru Date” stamp.

Complaint courtesy Courthousenews

Another Chase bank switch & bait lawsuit

February 12, 2009

I posted last week about a Chase lawsuit filed in Hawaii and this class action complaint filed in Cook County state court one ups the earlier one as not only did Chase start charging the borrower a $10 monthly fee in January 2009 but the bank also increased the minimum monthly payment to 5% of the outstanding balance.  If the borrower doesn’t like that, the bank will allow the borrower to accept an increase in APR from 3.99% to 7.99%.   

Complaint courtesy Courthousenews

Credit card factory busted

February 10, 2009

Is this the new, new economy? 

Vancouver metropolitan police busted three people who had setup their own credit card manufacturing facility.  At least they are making things!  The police found two credit card embossers, 15 computers, printers, a milk crate full of stolen and forged credit cards, loaded firearms and crossbows, and a number of counterfeit $100 bills.

Article  courtesy “Taking Charge”

Graph says it all: credit card attrition rates

February 8, 2009

This graph courtesy of creditslips show a doubling of involuntary credit card in the past year.  Just to be clear this is where the issuer has closed off the consumer’s credit card.

Chase sued: changed terms on fixed rate loans

February 7, 2009

According to the plaintiff who filed a class action complaint in Hawaii federal court, Chase Bank offered him a fixed rate on his loan which he accepted.  The plaintiff claims that  the language of the offer gives the “impression” that there will be no other fees associated with the loan for its duration.  However, in January 2009, the bank started charging the plaintiff a $10 service fee that he says violates the terms of the agreement. 

My take on this is that the law doesn’t care about “impressions.”  If the offer didn’t expressly say that service fees couldn’t be charged on the loan, then legally they could be.   Not nice but very typical of the industry.

Complaint courtesy Courthousenews

Lawsuit against debt relief services

January 25, 2009

Update:  I’ve received thoughtful responses which convince me that I should be more objective when discussing complaints.  I’ve changed the title of this post from “scammers” to “services.”

The plaintiff is suing Debt Resolution Partners and Freedom Debt Relief as well as others for offering debt relief services that in fact simply made the plaintiff’s debt load worse.  How they did this:

  • They advertised through print ads and their website that they could make people debt free within 12-36 months.
  • The debtor is to pay 5% of the service’s retainer and 10% the debt’s unearned service fees on a monthly basis.
  • Until all the fees are paid to the service, they do nothing to help settle the debts with the creditors leaving the debtor to continue to deal with the harassing phone calls and notices.
  • Under the agreement, if the debtor gets disgusted or frustrated with the service’s lack of progress, their only recourse to stop the monthly payments, at which time the debtor forfeits all rights to funds already sent to the service and the service is under no obligation to continue working on the debtors behave.

Result?  The lawsuit claims the debtor spends funds toward service rather than towards paying down the debt and often ends up with more debt and worse creditworthiness than before hiring the Freedom Debt Relief service.

Complaint courtesy Courthousenews

More pet-store crime: stealing sharks

January 21, 2009

Elbert Starks walked into a New York state pet store, plunged his hands into a fish tank and came up with a shark that he managed to take home and place in a 350 gallon tank.  But Mr. Starks wasn’t done yet.  Next, he walked into a Pet Barn, saw a credit card lying on the counter that turned out to belong to a store employee and he used it to purchase a $300 eel at “Parrots of the World” (buying an eel at a bird shop?)

The store owners reported the theft and the police put Mr. Stark together with the shark and eel and arrested him at his work.