Banks and other financial companies are trying to squeeze customers for every last penny. It is more important today than ever before, you watch out for rising credit card interest rates, as well as, all kinds of monthly fees and charges.
79-year-old Joe Fritz says his credit card company is trying to get more of his money and he can't afford it.
"I feel terrible because I've been a good customer with them for years and years," Joe said.
Chase added a monthly service charge of $10 to Joe's account and raised his monthly minimum payment.
Instead of paying $197 a month, Joe is now required to pay $486 a month!
Chase is making these same changes to thousands (Chase says less than 400,000) of accounts without advance notification, then telling disgruntled customers who call, their only other option is to accept an increase in their interest rate!
In Joe's case that would mean going from 2.99-percent to 7.99-percent!
"I think it's a big ripoff. I mean, I've been paying them every month, never late - never missed a payment for years," Joe said.
Chase says it does try to help customers keep their best rates and after Action News called, the company did offer Joe a more reasonable deal. But many other customers haven't been so lucky. Some are banding together and filing a class-action lawsuit.
And Chase isn't the only bank trying out creative cash-making methods.
Graduate student John Schreck is angry with Bank of America.
He says Bank of America charged him about $50 every month for at least a year and a half for its credit protection plus program.
"I calculated back until when I can actually get my statements $847 that they owe me; I have no recollection of signing up for this," John said.
Bank of America says it clearly informs customers about the plan's charges and has updated its welcome kit to further improve that clarity, but many consumers still feel duped.
"They're definitely being sneaky about this. I went on the Internet and found other people that have been feeling the same things I've been feeling," John said.
John was credited for two of the charges, but is now trying to get the remainder.
And he's used to fighting this type of thing. He says he did get a full refund when another company started charging him for its credit protection program.
You know those FreeCreditReport.com commercials?
While it is true that you do get a free credit report, you also are automatically billed for Experian's TripleAdvantage credit monitoring program unless you cancel within the first 7 free days!
In 2005, FreeCreditReport.com paid nearly a million dollars to settle federal charges that it did in fact mislead consumers.
While the company says it's changed its practices and is upfront, some advocates still warn to steer clear.
"It is deceptively marketed. FreeCreditReport.com is a scam," Cather Ngo of PennPIRG said.
So what can you do to fight back against these kinds of charges and fees?
Check your statements line by line, report any suspicious charges immediately, and insist new fees or interest rate hikes be eliminated. Be persistent and file formal complaints, not just with your bank, but with consumer advocacy agencies, as well.
Also - keep an eye out for any changes to your payment due date.
Some credit card companies like Chase, for instance, do offer helpful free services like allowing customers to choose their payment due date and automatically decline charges that would make you exceed your credit limit.
CHASE'S STATEMENT:
Tens of millions of Chase customers have taken advantage of promotional low rate offers such as the ones you mentioned. These changes outlined below will impact less than one-half of one percent of our accounts on file.
Those who are impacted have carried large balances for over two years while making little progress in paying them off. Beginning last month, we added a monthly service charge of $10 to select accounts and increased the monthly minimum payment from 2% to 5%.
Impacted customers who contacted Chase were provided an alternative that allows them to keep their current minimum monthly payment calculation. However, it does require a change to the current promotional rate APR. With this alternative, the customer's promotional balances with no expiration date would be changed to a 7.99% fixed APR and remain there until the billing statement that includes January 1, 2011. This option will allow the calculation used to determine
For the record, Chase has many tools available to help customers manage their account, including the ability to select their own due date to ensure it is a convenient time based upon their personal income flow. Free financial materials and account tools are available at www.chaseclearandsimple.com
BANK OF AMERICA'S STATEMENT
First, Bank of America regrets any inconvenience experienced by the customer. While we cannot discuss the customer's personal situation due to privacy concerns, let me make the following comments about customer notifications for Credit Protection Plus (CPP).
Bank of America works closely with customer focus groups to improve the effectiveness of our customer communications efforts. We have made updates to our CPP Welcome kit (see attached) that reflect improvements in both the clarity and usefulness of the information.
Bank of America has experienced a very low number of complaints related to Credit Protection Plus. In fact we have found that our customers have been using the product increasingly and activating the benefit areas of the service -- primarily due to increasing unemployment.
As you'll notice from the attached Welcome Kit, which all customers receive, and the two examples of customer bills (both online and paper statements) we clearly inform customers about the charges related to CPP and what phone number to use if customers wish to cancel the protection -- which they can do at any time.
PDF: Bank of America Credit Protection
Document: Bank of America Sample Online Banking Accounts Screen Shots
FreeCreditReport.com STATEMENT
Action News contacted FreeCreditReport.com on the phone. 6abc.com has compiled their responses below:
We're very happy customer signed up to get their free credit report, which is free. They get to test drive our product for 7 days for free. It is really a membership based product.
We're very upfront with our consumers about what we're doing. We're very clear off the bat; we say how much the membership is.
The reason why people come to us in general is because they are trying to reach their financial goals by doing different things. People come to us and stay with us for many different reasons.
We want people to value our membership and use our membership.
Some of the things we offer include: a credit score that comes from freecreditreport.com, credit alerts sent to you via email, monitoring credit score when pay bills and such, articles, calculators, quizzes related on credit and educated, identity theft help and support.
We are trying to make improvements to our product to help our members
Freecreditreport.com is the number one place to get information on the Internet with millions of members.
We are not affiliated with the government site and are upfront on website about it.
People need to be financially active in their own personal process and freecreditreport.com lets people reach their financial goals by using our site. People need to be educated about their credit and their credit scores and freecreditreport.com tries hard to educate consumers. We really want members to be happy with their membership; we want feedback on how to improve the membership
LINKS:
http://credit-protection-plus.pbwiki.com/
http://www.consumeraffairs.com/credit_cards/chase_credit_cards.html
http://www.consumeraffairs.com/news04/2009/02/chase_class_action.html
http://www2.ftc.gov/opa/2005/08/consumerinfo.shtm
http://www.pennpirg.org/
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