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The Chase Poisoned Example Spreads….but at least there is an Opt Out

In my mailbox this morning – Excerpt –

“Dear Valued Customer, ….The current economic environment has been difficult for business as well as many of our customers.

This challenging business climate has led Citibank (South Dakota), N.A., the issuer of the Sears Card, to notify us that they are making changes to the terms of many Citibank credit card offerings, including the Sears Card product….


Sears and Kmart Team

Included with this “valued customer” letter is a 20 page booklet of fine print that unfolded is 32 inches long entitled “Notice of Change in Terms, Right to Opt Out and Information Update”.

In the credit card world, no news is good news. Of course, Citibank is increasing all fees and interest rates (current rate of 17.99% will go up to 23.99% – 29.99%; fees for late payments increasing to between $20 to $39, etc….).

Reading all the fine print would put any normal person into a coma but included are these statements,

“To opt out of these changes, you must call or write us by March 31, 2009…..If you opt out of these changes, we will close your account, unless it is already closed. You must then repay the balance under the current terms.”

“We may change the rules, fees, and terms of this Agreement at any time for any reason. These reasons may be based on information in your credit report or general market conditions.

Citibank is wasting no time in putting the squeeze on their Sears and K-mart customers and in turn, I imagine that Sears and K-mart will be hurting. Thankfully, I have never had a balance that wasn’t paid off each month on my Sears card and rarely (once a year maybe….) used it due to the already mafia-level interest rates. I didn’t realize my Sears card was issued by Citibank until the notice came this morning — though checking the card just now, I see it is mentioned in tiny print on the back of the card.

Of course, in the battle we are having with Chase’s recent change in terms notice, they left out any mention of an opt out option or a period in which to exercize it. AND to add insult to injury, when I called to try to “opt out” (which they had lied to Congress about having) of their egregious change in terms, Chase informed me I had missed the deadline. The opt-out option and deadline which were not included in its change in terms notice. Hmmmm….easy to miss a deadline that didn’t exist.

Perhaps Citibank is realizing that Chase is losing the PR battle and that closely following Chase’s lead in this debacle is a sure way to anger customers, whom they should try to retain if it wants to have any hope of remaining in business long-term. I don’t attribute any humanitarian motive in Citibank’s change in terms (after all there is nothing humane about a 17.99% interest rate increasing to 23.99% – 29.99%) but at least Citibank is not adding a $10/month “service charge” that “is a finance charge” and omitting the opt out option.

A Catchy New Slogan for Chase might be – “Teaching Industry Leaders through the Ultimate BAD EXAMPLE”


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