December 22, 2008
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News: CompuCredit Corp. Con.
CompuCredit Corp has been ripping people off big-time, so spread the word. Unfortunately for CompuCredit though , they've just been busted by the FTC and have to pay $114 million back. They been hustling innocent people in the market by offering sub prime-interest $300 credit cards. When the victims receive their first statements for those credit cards, they would be shocked to find $185 in fees already attached to their new credit card account. Now they immediately find themselves owing $185 and holding only $115 of available credit left on the card.
Other people with better credit ratings would be promised credit cards with a $3,250" credit limit. What they weren't adequately told at the time was that, only half that amount would be available to them until after a 90-day waiting period. During this period, those victims would be evaluated for consumer behavior and their up-coming credit card limit could be reduced by employing CompuCredit's unseen "behavioral scoring model".
One third plan marketeered by a pawn debt collection company called, Jefferson Capital Systems, LLC. This plan offered to have a debt balance transferred to the new credit card and that the debt would be immediately charged-off and be listed as paid in full. Further, any black marks concerning that in credit reports would be wiped clean. What actually happened though, was that those people would be enrolled in a repayment plan and expected to still repay the debt and couldn't even receive their new cards until at least a quarter to a half of that debt was paid off.
The marketeering enterprise was vending both VISA and MasterCard credit cards under the guise of names like ‘Fingerhut Credit Advantage', ‘Aspire A Mas', ‘Emerge', ‘FreedomCard', ‘Tribute', ‘Aspen', ‘Aspire', ‘Majestic' and ‘Imagine'. The rulings from the FTC proceedings were that CompuCredit immediately desist from the ‘deceptive and abusive practices' and repay (‘redress') $114 Million worth of fees onto the issued cards. For cards already paid down below the damages, cash refunds will be issued up to around $3.7 million. CompuCredit will also be slapped with a $2.4 million penalty. For questions, call 1-877-FTC-HELP.