Credit Tips: Providian Financial Corporation Warning

Posted On: April 1, 2005

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Post subject: Beware of Providian Financial Corp

Yaeger Jaffe
Date: 11/26/2000 11:57 am CDT

Providian Financial Corp. The sixth largest credit card company in the U.S. had a tough month in June. Fist, the San Francisco- based company agreed to a deal with the Connecticut attorney general, who was investigating unjustified finance chages for add-on services without the customer’s clear consent. Providian didn’t admit any wrongdoing, but it did agree to pay $1.6 million to the state and to compensate cardholders who were harmed. Then, the San Francisco district attorney and the Office of the Comptroller of the Currenecy (the requlator for national banks) announced that a year long investigation showed that the bank had “misled and deceived customers in order to increase profits.” In that case, Providian again admited to no wrongdoing but agreed to pay more than $ 300 million to hundreds of thousands who were allegedly misled between June 15, 1995, and June 28, 2000. The customers will get refunds for fees and interest paid on certain Providian products. Officials are currently calculating the amount each person will receive. If you’re covered, you don ‘t have to do anything. Providian will come up with a list of affected cardholders, and the OCC hopes all checks will be mailed by the end of September. Lessons worth learning. Even if you’ ve never carried a Providian card, you can learn a lot from the evidence uncovered by the feds. The OCC’s investigation spotlights tactics some telemarkerters use. Knowing their strategies can help you identify red flags—-and know what key questions to ask—when you’re assessing any credit card pitch. For example, the OCC says that one Providian program promised to beat the rate customers were paying on their current card. Telemarkerters talked about “great savings,” but were instructed never to get into specifics. Actually, the OCC says, the plan shaved only 0.3 to 0.7 percentage point off a customer’s current rate within 90 days; otherwise, OCC says Providian charged as much as 21.99%. The government also blasted Providian’s “credit protection” plan that wo7uld let cardholders suspend payments–without accruing interest for up to 18 months if they were hospitalized or out of work. The OCC says Providian failed to adequately disclose major limitations. One catch: The protection was also limited to the number of months for which you had paid for it. For example, if you were hospitalized one month after beginning the program, payments could be suspended for only one month. Another questionable perk: The OCC says that Providian didn’t adequately disclose that its vaunted “no annual membership fee” card was available only to customers who paid $156 per year for a credit-protection plan. Alan Elias, Providian’s vice president of corporate communications, says that information was included in the cardholder’s contract information.

(Lesson: Read the fine print)

Another important lesson” conplaints to requlators really can make a difference. The Providian investigation was sparked by a high number of complaints to the San Francisco district attorneys and the OCC. If you don’t get satisfaction from your bank on complaints, take it to the OCC at 1-800-613-6743

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Linda
Date: 11/27/2000 9:37 am CDT

Well, hey!! After all this, it will be safe to deal with them, huh? They’ve been caught, they’ll behave better now. I have a PVN card - they helped me rebuild my credit - no problems at all.

Linda

CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!

Debra A Glynn
Date: 12/2/2000 12:01 am CDT

FIRST THIS IS NOT AT THREAD SO DONT THINK IM THREADING YOU THIS IS THE ONLY WAY I CAN THINK OF TO CONTACT YOUR OFFICE MY ACCOUNT NUMBER IS xxxxx I WANT TO KNOW IF I CAN CANCELL THE ACCOUNT BECAUSE I CANT OFFERD IT RIGHT NOW SO COULD YOU SEND ME THE AMOUNT THAT I ALREADY OWE YOU BY MAIL AND THEN I WILL CARD THE CARD UP THANK YOU MY ADDRESS IS 1C POND AVENUE NEWPORT,R,I. 02840 THANKS AGAIN.

CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!

Board Monitor - CA
Date: 12/2/2000 12:03 am CDT

Debra,

This message board is not affiliated with Providian or any other financial institution for the matter. You will need to contact them directly. One other word of caution…never post your account number on a public forum of any kind. We have no control over who reads these posts.
To insure your privacy, I deleted your account number.

Good luck and let us know how things turn out!

Best Regards,
Curtis Arnold
CFCCT P.R. Director
http://www.cardratings.org

CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!

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