A blog experiment by Brad Mills.


Credit where credit is due

I've got one of those "rewards" credit cards. You know the routine here — spend money and get points, and every so often, convert the points into something tangible like a free night at a hotel, let's say. Hmm, sounds a lot like the Chuck E. Cheese racket I blogged about recently. Anyway, this particular reward is attractive enough that it's the card I use for just about everything. And no, I'm not going to name the reward program... because first of all, it's pretty popular, and second, I'm giving them one last chance to redeem themselves before I out them for bad behavior.

Apparently this card is — by admission of the bank's own fraud department — very easy to compromise. It has now happened to me twice, so I'll gladly vouch for that statement. Both times, the thief generated the card number algorithmically and then did a "test charge" of a dollar or two to see if it was a valid account. Upon discovering it was valid, the thief then ran up more lucrative charges. The bank's software is sophisticated enough to detect that pattern of activity and flag the account, which prompts the bank's fraud department to call me and discuss the situation.

We had one of those "discussions" earlier this year, and it was the second one in less than two years. Having been through this once already, I thought I knew what was going to happen — they'd remove the fraudulent charges, cancel the card, issue a new one, and stick it in the mail. I'd receive the new card in seven to ten business days, call and activate it, and all would be right with the world again. Well, they almost got it right. They forgot that little bit about removing the fraudulent charges.

The Federal Trade Commission believes they're supposed to, and so do I, so I wrote them a letter explaining that I wasn't going to pay for those charges. I also told them they needed to take them off my account along with any associated finance charges which may accrue. I sent it Certified Mail with Return Receipt — it cost $5.54. I got the receipt (a green postcard with my address and a tracking number) back with a signature on it, so somebody there received the letter. So far, it's the only actual acknowledgment I've gotten... and it's been almost a month.

So Friday, I got the first post-letter statement from the credit card company. They removed the charges just fine, but since I hadn't paid my bill in full (I omitted only the fraudulent charges), they tacked on finance charges as is the normal procedure for people who carry a balance around on their credit cards. I'm not one of those people — I pay my balance in full every single month and have for many years now. I'm just in it for the rewards program. I decided to give them a call and see what the hell they were trying to do here. Turns out they were just running on autopilot, and this is what their billing software was programmed to do. And apparently if there's a balance of any sort — regardless of where they came from or what the circumstances are — the finance charges accrue.

After about half an hour of waiting, a "specialist" finally looked at my account. The specialist told me the interest charges would be credited back to me on my next statement, and in the meantime, could I please just go ahead and pay the balance in full so no further interest would accrue? The specialist further said there was no way to just send me a new statement showing the removed finance charges because a statement had already been issued (????), and again, assured me that it would come off on the next statement.

I asked one more question of this arrangement. I asked if I could receive, in writing, a letter or something explaining that if I paid everything off in full this month, that I'd receive a credit in the amount of the finance charges next month just as discussed. This just sounds too much like "I'll gladly pay you Tuesday for a hamburger today" for me to be completely comfortable with it, and basically, I want something on paper in case they renege (which is what I'm expecting will happen). The specialist said that wasn't a problem at all, and I would indeed receive that letter. Which is weird, because it implies this is a fairly common procedure at this bank — at least one common enough that they already have a form letter in place for it.

I hope I get the letter before the bill is due. And I hope they do what they say they're going to do. The way I see it, they're already skirting the law — first, by applying finance charges to a disputed balance, second, by not acknowledging my dispute letter (a legal requirement of the Fair Credit Billing Act), and third, by basically borrowing money from me — in the amount of the finance charge — for one month, interest-free. Given that, I don't have a lot of hope here, and I suspect this relationship is going to end badly. Meanwhile, I'm not using that card until this is settled and I have no qualms about canceling the account completely.

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