Credit card applications leading to court examination
Turns out to be that there is still someone looking out for banks that conduct unfair marketing strategies. First Premier Bank has been obliged to pay refunds to settle suit over credit cards. This bank has already been criticized for its deceptive practices before and it claims that changes have already been made. However, a recent suit filed by Attorney General's office has shown that there are still things to be revised in bank's method of promoting cards. The result of investigation is as follows: First Premier Bank will pay $4.5 million in refunds along with $105'000 in penalties.
First Premier Bank targets high risk subprime lenders who have low income and poor credit history. Such consumers are always looking for ways of improving their credit score and acquiring access to services that require credit cards. Nonetheless, the lack of serious funds does not stop card issuers from making profits.
Up until now, First Premier Bank was promoting cards with attractive terms to encourage more credit card applications among low income families or people with no/bad credit history. Consumers were promised $2000 credit limit, 9.9% fixed APR and no processing costs whatsoever. Moreover, such cards were marketed as gold and platinum to highlight one's prestige and status (another luring technique).
One of the customers, who have been pre-approved for two Platinum Visa cards from First Premier Bank on the above terms, is now facing a difficult debt situation. According to him, he was in search of a way to improve his credit score. However, his hunt for an affordable credit card has stopped as soon as First Premier pre-approved him for their cards. The terms of the card seemed fair enough, so he ended up applying for them.
In reality, all he got was $250 credit limit on both cards and $180 in processing and upfront fees together with a doubled interest rate. After using his card twice for purchases that totaled roughly $50, he ended up having a debt of $1000 on both cards due to various charges and fees. He cancelled both of the accounts immediately, but that didn't help him get rid of the debt which has been snowballing since the very beginning. What's even worse is that First Premier contacted credit agencies which have placed negative marks on customer's credit report.
But such customer is not the only one out there. Attorney General's office has received hundreds of complaints from credit cards holders regarding deceitful practice on the side of First Premier Bank. This has spawned an investigation which proved that First Premier was carrying elusive practice.
Now that the issue has emerged, First Premier has been cooperating with Attorney General to resolve the matter. Certain limitations have also been imposed on the way First Premier markets its products. The bank is now prohibited from charging an account with any fees before it has been activated. It is also banned from fraudulently advertising and promoting its credit cards to subprime sector.
First Premier Bank has paid the costs of fooling its customers in full. This has been a good example to other credit card issuers as well. A lot of people are being charged with unfair fees, but most of them find themselves obliged to pay them. If you have any concerns regarding your credit card, try to contact the bank first. If that doesn't help, seek for help from the authorities.