Lemon Award Finalists Named on CreditCard.org's Website

A while back, I reported on CreditCard.org's lemon award nominees. Today I revisited CreditCard.org and found a link of finalists. The page contained a press release that is dated in the future, but since it is listed publicly, I am going to go ahead and report the nominee today. That will actually make ahead of Dave Ramsey, who I had first heard of the nominees from.

Bad Banking Has its Own Annual Award

The worst of the worst get the Lemon Award for Bad Banking

CHICAGO , IL -- (PR Newswire) - December 14, 2006 -- Ashley Clayton has a black hole in her bank account. Others have it too. This fraud is called 'CIC credit report' and appear on credit card statements. "They charge me $9.95 and don't give me any information about how to cancel this," complained Ashley.

The Claycomo Missouri resident is not alone as countless charges pour in about FreeCreditReport dot com . Free Credit Report along with the financial industry's worst offenders are being awarded the "Lemon Award for Bad Banking". Here is the 2006 summary write up: Full excerpts at 2006 Lemon Award :

(1) First Time Offenders Get Maximum Sentence at WaMu

Washington Mutual (NYSE:WM) gets the 2006 CreditCard.org Lemon Award for Bad Banking for taking first time late-payers to an interest rate over 31.9%. According to the terms:

Each time you default… we may increase the APRs on your account up to a maximum of the Default APR (31.99%)

Washington Mutual acquired Providian which has a history of class action judgments (one topped $400 million). Annie Chang, Director of Education for CreditCard.org stated, "If big tobacco started a credit card company, they'd call it Providian" (now owned by Washington Mutual (NYSE:WM) ) . "If there's a poster child for CreditCard.org Lemon Award, it'd be Washington Mutual," said Larry Chiang, founder of CreditCard.org and added, "it's the first bank ever to charge you for a credit line".

(2) 0 to 29.99 in 2 hours

"Late is late", said the Bank of America customer service rep, based in Colorado Springs CO, referring to the fact that the payment posted the day it was due… but was two hours late.

Each time your minimum payment is late ( i.e. , not received by 2 p.m. , ET, on its Payment Due Date), or the account balance is over-the-credit-limit, we may increase each of your account's Variable APRs up to the Default APR of 29.99%

Bank of America (NYSE:BAC) was penalized in a class action suit for "rolling back" payment due dates according to court filings in Delaware . They could squeeze more late fees by rolling back the due date time to 10am and they were caught and penalized by the FTC. Bank of America, for taking your consumers 0 to 29.99% in two hours, you get the 2006 CreditCard.org Lemon Award for Bad Banking.

(3) Best Buy gets CreditCard.org Bad Banking Lemon Award
Buying the extended warrantee with a Best Buy (NYSE: BBY) credit card is, at best, an opportunity to argue for MONTHS whether Best Buy will honor the initial promise of warrantee. Do yourself a favor and take advantage of the free 'Buyer's Assurance Plan' on an American Express Card (NYSE: AXP) for the purchase and say no to the Best Buy extended warrantee.

(4) Reverse Mortgages get Bad Banking Lemon Award
There's the saying, "A fool and his money are quickly separated". Well there's a theme that the AARP (American Association of Retired Persons) is harking is that, a fool and his house are quickly separated too. Reverse mortgages are also called Home Equity Conversion Mortgage (HECM) and they are wrought with traps.

(5) Membership Penalizes -- Facebook Members Pay 23.24% APR
There's a product being hawked on Facebook.com -- A Visa with an APR of 18.24 or 23.24% which the disclosure box makes very unclear. The product "Plus One" is issued by Chase ( NYSE:JPM) and Facebook members get lured into an abush with a free t-shirt and $20 Amazon Card. Facebook gets the 2006 CreditCard.org Bad Banking Lemon Award for charging students a rate that's five times higher than the prime rate. Facebook is the first social network to get a Lemon Award for Bad Banking.

(6) Annual Credit Report dot com
Annual Credit Report.com tricks consumers into buying credit score. The original spirit of the site is to comply with an FTC mandate that consumers be allowed to view their credit reports once a year from Trans Union, Equifax and Experian. What has happened is that Annual Credit Report.com has turned into a nice tidy profit center when traffic is redirected to sell consumers their credit score. AnnualCreditReport.com turns a legal requirement into a lead generating site and the FTC deserves a CreditCard.org Bad Banking Lemon Award for allowing this to happen.

(7) Discover Credit Card on Campus

According to a October 2, 2006 article in USA Today , student were presented a credit card application with NO disclosure box. US credit states in clear terms that consumers must be presented a "Schumer" disclosure box that outlines cost, terms and penalties. Discover (NYSE:MWD) , you get a CreditCard.org Bad Banking Lemon Award for breaking the law.

(8) FreeCreditReport.com for Not Being Free

It charges for something that's free at Annual Credit Report.com. Experian (symbol: EXPN.L) owns FreeCreditReport.com gets the Lemon Award for violating federal disclosure laws. The English controlled entity runs ads on US TV, radio and Internet claiming "free reports" but charges $79.95. This CreditCard.org Bad Banking Lemon Award was brought to light by the office of California Attorney General, Bill Lockyer.

(9) Sun Trust Skip-a-Payment Makes Balance Swell .

SunTrust (NYSE: STI) sends customers a "skip-a-payment" offer with a "Merry Christmas, Happy New Year" message. It sounds good to the consumer, but made Nathan Ballred's balance go from $ 178,000 to over $ 183,000 in a few months. The original loan amount had been $182,000.

All payments were made on-time but SunTrust said balance went up because it was a balloon note and interest wasn't being satisfied due to the skipped payments they had given. SunTrust said these offers weren't really good for customers. The bank knew it was a balloon note, so why offer this to someone knowing their balance will go up? SunTrust gets the 2006 CreditCard.org Bad Banking Lemon Award for misleading its customer, Nathan Ballred.

(10) $93 Fee For Tiny Debit Overdraft .
Steve Pullis writes: Regions Bank, a large Regional Bank out of Birmingham, Alabama, has adopted a policy of allowing students (or anyone else) to use their Visa Check Card (debit card) even though they do not have funds to cover the transaction. This is done so that they can reap a $31.00 overdraft fee per transaction.

My daughter is a student at the University of Memphis and overdrew her account by 28 cents, for which she was charged $31.00. She then used it again for a couple of dollars and was charged another $31.00. By the time I was able to catch the problem and let her know that she had no money and was being charged by the bank, she had accumulated yet another overdraft fee of $31.00 for a grand total of $93.00 to cover less than $20 in overdraft amounts. I raised a ruckus with the bank about allowing ignorant college kids to overdraw their accounts, but they basically shrugged their shoulders. Regions Bank (NYSE: RF) gets the 2006 CreditCard.org Bad Banking Lemon Award for charging Steve Pullis' daughter $93 in fees.

(11) Multiple low credit line accounts, Same Capital One Bank
Capital One (NYSE: COF) gets the 2006 CreditCard.org Bad Banking Lemon Award for putting customers like Brad Kehn over a barrel. Brad writes, "My Capital One visa with a $300 credit limit keeps going over the balance with late fees causing over the limit fees. What's worse is that we keep getting more Capital One credit cards with similarly low credit lines."

According to Business Week , Nov 6, 2006 , "When Brad Kehn's Capital One credit card, it took him only three months to exceed his $300 credit line and get soaked with a $33 over-the-limit fee. But what surprised the Plankinton, South Dakota resident more was that Capital One then offered him another card even though he was over the limit -- and another and another.

(12) VistaPrint.com for Un-Authorized Charges

'Free' continues to be an expensive word in credit and VistaPrint may be the worst offender. After you order "free business cards", VistaPrint relays your credit card to some other subscription service that bills you $14.95.

Richard Lee noticed unauthorized charges of $14.95; dated June 20, 2006 and July 20, 2006 . They were for "Passport for Fun". There are dozens of documented cases against Vista Print at CreditCard.org. VistaPrint.com is the first online merchant to get a Bad Banking Lemon Award.

About CreditCard.org

CreditCard.org is a site that helps people to drill down on credit issues by archiving answers to every problem submitted. Common problems can be searched and credit pitfalls can be sidestepped. Asking CreditCard.org will always be FREE. Contact them at problems@Credit Card.org

It collects nominations for Lemon Award for Bad Banking from consumers all year long. Send them to nominate@CreditCard.org .

CreditCard.org - 2021 Midwest Road, Suite 200 , Oak Brook IL 60521 http://www.CreditCard.org
Contacts:
Elaine Abereen
Media Relations
CreditCard.org
650-651-1580


Annie Chang
Director of Education
CreditCard.org
650-651-1525