A banker, asking bankers a question-LOL.

My husband is having a problem with a well known department store. I hate to mention a name, but here's a hint, the first of their thousands of stores was opened in Evanston, Wyoming before most of us were old enough to go shopping, or even born.

We've both been lifetime customers of this chain, as were our parents. We have never missed a payment and each spend about $1,000 a year with them.

Last fall my husband paid his card to zero, but unfortunately the payment was a couple of days late. We all know how quick some companies slap on those late charges, so it literally could have been only hours late. Well, my husband got the next invoice and it had the $25 late charge due, but of course the balance was zero. He should have called them immediately to have it removed, but he was so POed about it that he wouldn't. He even exclaimed "I've been a customer for 30 years, I am not paying this."

The next month we got a bill for $50. Of course it was threatening and POed him even more. This went on for 4 months, each time a new late charge, due to a late charge. Finally I couldn't stand it anymore, so I called them and explained the situation. The gal on the phone refused to delete the first late charge, but said she would invoice me for just the original amount. I asked her if it was worth the measely $25 to lose two lifetime customers (separate accounts) and she basically said yes. She was very helpful and almost anxious to close my account, so now I'm POed. We never did get a new invoice for $25, which I was will to pay at the time.

My husband had one of the highest credit scores I have ever seen. Last I knew, it was 842. I'm up there as well. We are the kind of customers a business would or should want to keep happy. In who's business world is $25 worth losing two lifetime customers?

As mad as I am about how they have treated us, the meat of my complaint is this: How can they get away with charging late charges on late charges, reporting the account past-due to the credit bureaus due to a late charge and now have turned the account over to a collection agency to collect a late charge? This is not legal in my world, how is it legal for this company, (and their bank)?

Thanks for letting me vent. I'm ready to call a lawyer over $25. It's all so crazy.

Deb

To answer your question it will be important to know what state the card was issued from. Just because the HQ is in Wyoming doesn't mean the credit card division was chartered in Wyoming - they could very well be out of Delaware or one of the other handful of states that do allow the practices you've described.

Before I gave up, I'd take the time to write a letter to the company CEO. Don't mail it to the "complaint" address on the credit card statement, mail it to the CEO at the corporate HQ. My guess is you'll get an apology, a clean credit record and maybe even a couple gift certificates to entice you back.

Good Luck

This sounds like a clear violation of the FTC Credit Practices Rules 16 CFR 444.4 to me:

§ 444.4 Late charges.
(a) In connection with collecting a debt arising out of an extension of credit to a consumer in or affecting commerce, as commerce is defined in the Federal Trade Commission Act, it is an unfair act or practice within the meaning of section 5 of that Act for a creditor, directly or indirectly, to levy or collect any delinquency charge on a payment, which payment is otherwise a full payment for the applicable period and is paid on its due date or within an applicable grace period, when the only delinquency is attributable to late fee(s) or delinquency charge(s) assessed on earlier installment(s).

(b) For purposes of this section, collecting a debt means any activity other than the use of judicial process that is intended to bring about or does bring about repayment of all or part of a consumer debt.

Sounds like a great class action lawsuit opportunity!!

Thanks Randy and Greg. I was definitely contemplating the letter to someone who cares. (And I'll admit, I was thinking a remedy plus a gift certificate would help my anger, lol). And Randy, that was my first thought. Unfair and deceptive is unfair and deceptive in anyone's book, (by my logic anyway). I immediately thought class-action. I think what I'll do is write a very nice letter, citing the FTC and ask for an immediate response. I won't threaten, just point it out, (which I did to the last "customer service" person I talked to).

My husband owes me one if I get this resolved, don't you think? ROFLMAO

Deb

Careful, I might stop by and collect this fall on my way to my annual mule deer hunt in Idaho

LOL!!!! I'd be bummed if you didn't stop by!

Why are you surprised by this? Department stores ship merchandise produced by slaves in Sri Lanka and charge you a 1000% mark-up. Considering they are already screwing you there, what made you think they wouldn't do the same on the store credit card? (which is the entire point of department stores providing credit) I would never ever recommend anyone get credit from a department store, and I would advise you to take up the representatives offer to close your account.

Let me explain my last comment a little more -

I used to work management at a department store (which very possibly could be the one you refer to). The *entire* point of store credit is to screw the customer this was known to my self and everyone else employed by the company who wasn't hopelessly naive. The company even owned the bank that issued the credit.

It was even company policy to mandate employees use the store credit card in order to get the 10% employee discount. (guess how fast those 10% "discounts" vanish when you get in major debt at 20+% interest. At the level employees were paid it happened all the time) The company even tried to push this. Sometimes corporate would tell us to make sure everyone knew it was "extra 15% off day for employees"! This essentially put some employees in servitude to the company like the old company store concept. They got paid a check at $7/hr, and a ton of that would go straight back to the company once they got in debt to it.

The only thing corporate cared associates do was push credit to customers. It didn't matter if associates didn't sell a single thing for weeks, as long as they got the credit cards out they were in a good position. Failure to sell the cards for a week or two, however, could mean that associates job.

I never said anything of course, but it always made me sad seeing people go in to debt to buy something for $400 on credit that only cost the company a few dollars at most. I was being literal with the 1000% mark up statement.

As a result of my experience the credit practices of department stores make me sick. Entirely unethical. IMO if you get credit from a department store you are just asking for trouble and to be ripped off.

Wyogirl - Sounds like JCPenney's to me.

They no longer own or manage their own credit card. It was outsourced several years ago. I'm not exactly sure how the deal was structured. BUT, a word with the store manager, politely advising him that may no longer be patronizing his store because of the treatment by the Credit division, can have amazing results.

I worked for them in another life, and the Store managers always carried a lot of weight.

Anon - I fail to see that an employee making a decision to purchase something on credit, without force, is servitude. Credit cards should only be used for convenience, and balances should be paid in full every month. If people don't use credit wisely, why is it the stores fault?