Comments on: FTC shuts down prepaid debit card vendors with hidden fees http://www.bloggernews.net/19334 High-quality English language analysis and editorial writing on the news. Thu, 28 Aug 2008 18:40:03 +0000 http://wordpress.org/?v=2.3.3 By: S. LeBlanc http://www.bloggernews.net/19334#comment-76204 S. LeBlanc Sat, 18 Aug 2007 06:16:15 +0000 http://www.bloggernews.net/19334#comment-76204 While it is true that this one company performed unauthorized debits against consumer accounts, and while it was not proper, probably illegal and just not right, I take issue with the writers statement regarding the consumers supposed ease in which they can obtain a debit card from their bank with seemly little or no cost. Persons with poor credit AND a checking account are not always "freely given" a debit card just because they have a checking account. I know this because my bank would not "give" me one. They said there was still a certain amount of "risk" associated with the debit card issuance due to my credit situation. I had to go buy a debit card from one of these companies. I take 100% responsibility for my personal credit issues, but I have to say that I am in the same situation as hundreds of thousands of other credit challenged American's. My point is that not all of the companies that sell these debit cards are "bad" or doing anything illegal or immoral. They have a huge market, held captive by the rather biased and often times improperly scored credit reporting agencies. The ones (card issuers or marketers) that do play fair are filling a very important need. A person cannot rent a car, buy an airline ticket and in most instances cannot make purchases on the internet with a Visa or MasterCard logoed card. If you want to cry foul, you need to take a hard look at the credit scoring policies of "the big three" credit reporting agencies. Their scoring policies are very biased against the consumer and in favor of the companies that report credit scoring to them. The "way" they let credit issuers report is often times run "un-checked" by the "big three". In fact, most of the time, they simpily take the word of the reporting company and have absolutely no checks or balances in place to prevent improper reporting. I had a 24 month revolving charge account with a regional appliance company. While I did legitamately get more than 30 days late on three occassions, they reported me ninty days late 37 times. How could I be late 37 times in only 24 months? Who knows, but I cannot get that removed from my credit report unless the merchant takes the first step in authorizing this change. If that is not enough, take a look at our banks. Supposed honest and fair. "Federally Insured" and truted keeper of our money. If you get $20.00 from a bank ATM and it charges you a $3.00 fee, you just paid better than 15% interest on your own money. Look @ some of the "National" banks. Most of them are in state court defending themselves from the States Attorney General's for charging "usurious" NSF fees. Sometimes as high as $35.00 (plus tax). What makes it so bad is that they usually run their debits BEFORE they post their credits. This "up's" their chances of getting your checking account into a lower dollar position before posting credits, thereby increasing their chances of getting you in an NSF position, subject to NSF fees before they pull it back out of the negative when they post the credits (deposits). You want unscruplious? That is a prime example of it!!! While it is true that this one company performed unauthorized debits against consumer accounts, and while it was not proper, probably illegal and just not right, I take issue with the writers statement regarding the consumers supposed ease in which they can obtain a debit card from their bank with seemly little or no cost.

Persons with poor credit AND a checking account are not always “freely given” a debit card just because they have a checking account. I know this because my bank would not “give” me one. They said there was still a certain amount of “risk” associated with the debit card issuance due to my credit situation.

I had to go buy a debit card from one of these companies. I take 100% responsibility for my personal credit issues, but I have to say that I am in the same situation as hundreds of thousands of other credit challenged American’s.

My point is that not all of the companies that sell these debit cards are “bad” or doing anything illegal or immoral. They have a huge market, held captive by the rather biased and often times improperly scored credit reporting agencies. The ones (card issuers or marketers) that do play fair are filling a very important need.

A person cannot rent a car, buy an airline ticket and in most instances cannot make purchases on the internet with a Visa or MasterCard logoed card.

If you want to cry foul, you need to take a hard look at the credit scoring policies of “the big three” credit reporting agencies. Their scoring policies are very biased against the consumer and in favor of the companies that report credit scoring to them. The “way” they let credit issuers report is often times run “un-checked” by the “big three”. In fact, most of the time, they simpily take the word of the reporting company and have absolutely no checks or balances in place to prevent improper reporting. I had a 24 month revolving charge account with a regional appliance company. While I did legitamately get more than 30 days late on three occassions, they reported me ninty days late 37 times. How could I be late 37 times in only 24 months? Who knows, but I cannot get that removed from my credit report unless the merchant takes the first step in authorizing this change.

If that is not enough, take a look at our banks. Supposed honest and fair. “Federally Insured” and truted keeper of our money. If you get $20.00 from a bank ATM and it charges you a $3.00 fee, you just paid better than 15% interest on your own money. Look @ some of the “National” banks. Most of them are in state court defending themselves from the States Attorney General’s for charging “usurious” NSF fees. Sometimes as high as $35.00 (plus tax). What makes it so bad is that they usually run their debits BEFORE they post their credits. This “up’s” their chances of getting your checking account into a lower dollar position before posting credits, thereby increasing their chances of getting you in an NSF position, subject to NSF fees before they pull it back out of the negative when they post the credits (deposits).
You want unscruplious? That is a prime example of it!!!

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