January 22,2009
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It's Just Not Fair!, Pt.3
– Hey, you tricked me...So, how do you substantiate if your credit card case is deceptive? Here are the guidelines as determined by the FDIC. Like ‘Unfair' treatment, ‘Deceptive' treatment has some qualifiers. You can't substantiate it unless these three conditions apply:
1) Does it mislead credit card consumers or is it likely to? Capital One (the "no hassle" people) will tell you on the credit card brochure "we won't charge your fixed rate [6.99%] on balances transferred today." The Disclosure Table says:
- Purchases APR: 0.0% till...[11 months later].
- Special transfer APR: 6.99%.
- Balance transfer APR Same as for purchases.
So you call and ask before opening the credit card account and placing the balance transfer, if the rate is going to be 0.0%. The first person says: "Yeah, I think so." Then you ask to speak with the boss. The night manager gets on and says: "Absolutely. If you have any problems, just call back during the daytime and they'll fix it for you." You make the transfer and, when your first statement arrives, boom – there's a $47.99 finance charge added to your bill. You call back during the day and ask for the boss first off. The response from that boss is "I can't help you. This is what you get." You then ask for the boss's boss, who gets on the phone next. His response is: "No way. It's not gonna happen. You've made a ‘Special transfer' (first time anyone's mentioned that term) and 6.99% is going to be your rate." Caveat emptor. Incidentally, the severity is increased by how many times the deception is repeated by the credit card lender.
2) Is the credit card consumer's mis-interpretation reasonable under the circumstances? Was the mis-interpretation in the previous case reasonable? To note: the FDIC looks closely at both the circumstance, the marketing representation and, even, the ‘financially sophistication' of the credit card consumer as to what "reasonable' is. This is why special rules apply for students and the elderly. The outcome of the FDIC's decision will be judged from the perspective of the credit card consumer or in the case of ‘class action' a 'reasonable member of the targeted group'.