Thursday, February 21, 2008

Protect Yourself from Credit Protection Plans!

Credit card "credit protection plans" - an insurance plan that is supposed to cover your minimum payments should the customer lose his job, is admitted to the hospital, becomes disabled or dies - are the biggest rip-off going, yet they get very little bad press, more than likely, because of their "affiliation" with the big credit card companies. "Affiliation", more than likely, means the credit protection plan is just another division of your bankcard company, although they will do their very best to make you believe otherwise. After asking several times, in several different ways I finally found out my parent's credit card "credit protection plan" was with the same bank that issued their credit card, Bank of America.

Having worked for a bank card company at one time, I know a good percentage of customer inquiries are from customers who signed up for credit card protection plans who were not aware of being enrolled until they saw the charge on their statement. This has happened to me several times. I will have to call, cancel the service and have them credit the charge back to my account. I did not agree to enrollment because why would I want to add, what would be the equivalent of 10%, to my APR for absolutely no reason? No matter what the credit protection plan advertises, the eligibility requirements are so restrictive, the chances of the customer collecting are slim to none.

I also have personal experience with the so called "benefits" advertised by these plans...

After discovering a $69 charge on her credit card statement for a "credit protection plan", my mother knew nothing about, but had been paying on since 2003, we inquired to see if - since they could not reverse the charges - we could cash in on the benefits considering my mother (71-years old) had just been released from the hospital less than one month ago. We were told we had only 30 days from the time she was admitted to the hospital to request, collect the necessary proof, and then submit the forms. So, after paying a couple of thousand dollars, at least, my mother and father (77-years old) never collected a penny, even though they have been hospitalized repeatedly over the last five years.

One could definitely argue my parents should have paid closer attention to their credit card bill, but in their defense, with as much as they've gone through; it's amazing their bills were paid at all. I'm sure even if my mother knowingly enrolled in 2003, she was sold a bill of goods.

The sad truth is the credit card industry targets the elderly because they know they are the most vulnerable. Even if one takes the time to read the "mouse print", barely readable with 20/20 eyesight, there are so many loopholes that allow the bank to deny claims under credit protection policy, that there is no way to comprehend what would be covered. We need protection plans protecting us from "credit card protection plans"!

Credit insurance -- This "perk" preys on fear and is as necessary as a bee suit in Alaska. For an exorbitant premium, the insurer agrees to make minimum payments on your debt should you become unable to. You'll pay $13 a month to get a credit protection plan for a $2,000 balance. The laws of probability -- and the FTC -- are on your side anyway. And they're free.
Here are a few of examples of the millions of people scammed by credit protection.
Assad of Miami FL (02/12/08) says, "I have been paying for credit protection on this credit card in case of an emergency. Last year I lost my job in part because I was sick. I called and emailed washington mutual about my problem so said they would send me paperwork to activated the credit protection plan I have been paying every month. They never sent me anything and sent me to a collection company. This is after almost $50.00 they charged me every month for the credit protection..."
FIA card services added what they called a credit protection plan to my closed account that took a 3k bal to 7 k since 2002 with no purchases. This company is a scam! They do not even have a credit protection department, I have called over 20 times trying to get this problem solved....
I called FIA Card Services on 9/11/07 to transfer balances to their FIA Card Services Account/Sovereign Bank Card account. I got my first statement end December 07. In fact I have been out of home at the time I received the statement and I saw this statement first week January. I immediately called and made a phone payment. Approximately two weeks after I made the payment, I noticed an amount of $ 61.77 on the statement against credit protection Plan. Then, I called FIA Card Services who directed me to the Credit Protection Plan Customer Services Rep who informed me that I have committed myself for a Credit Protection plan and began explaining benefits of Credit Protection Plan (“If you die or lose your job you are being protected”) which words I am hearing for the first time. I requested him to kindly cancel the Plan which he did without any hesitation. When I asked to be reimbursed, I was told that this is not possible, because 30 days have lapsed since the enrollment in November 07....
I was charged for protection plan monthly that i did not authorized or trial on.
I am steaming mad about being lied to or treated unfairly...I received the bill I noticed that my min payment was for 168.00..and 44.00 was going to go to some program called 'credit protection plan'....I immediately questioned this, called the 800 number on my bill..it was really weird because there was no Bank of America greeting it was pretty generic and did not identify the company I had to call at least two times to verify I actually dialed the correct number....
When I signed up for my First Equity Credit Card I also signed up for their credit protection plan as well. It stated that by signing up for the plan it would cover my monthly bill for me in the case of disabilty from my job, that was one of about 10 different situations. Well I called the company to activate it and it was. 1 month later I recieved my bill with no credits paid towards it late fees and they still charge me for my credit protection coverage. I paid anywhere from $35 to $55 a month for this coverage and for it not work for me...
Please let everyone know...If someone calls during your dinner to sell you a Citibank Credit Protection Plan- JUST HANG UP! It is not the cardholders credit that they are protecting. It is another corporate ploy to exploit those who can least afford it...
After receiving my mastercard...statement (closing date 11/08/2001) I noticed a very high charge for credit card protection (insurance) for $100.99...
In addition, Federal law limits every credit card customer to a maximum of $50 liability for unauthorized use of his or her credit card. Every credit card bank must have procedures in place for disputing unauthorized charges.

4 comments:

eclectic sufferer,  19:57  

I had abdominal surgery and my incision became seriously infected and I ended up having 2 more surgeries. I paid for "credit protection plan" since I got this card. I almost died from the infection but even though I sent the required form to them I was told of my ineligibility.

I was told that Credit protection and my bank card company were separate only to find out they are one and the same company. I told them I pay $104.00 a month for this protection and that this is a crime and I would press charges.

I didn't have a leg to stand on. How much will they be allowed to get away with before something is done?

I have always paid my bills on time and have an excellent credit rating and because of this incident, where I thought I was protected, my credit rating has plummeted.

Eric,  20:23  

I obtained a credit card through Bank of America a few years ago and I included the Credit Protection plan.

Recently I was put on disability. I immediately contacted them and requested the account protection I've been paying for. They told me they would send a form for the doctor to fill out and return it to them. I followed the directions exactly.

I did not pay the bill as instructed.

All of a sudden I was receiving phone calls demanding I pay my bill. I tried to explain my situation and they told me it's not their problem.

They told me my credit status would be ruined, added more charges to my account and told me I was not on the plan.

It has been a nightmare and the more I try to resolve this issue, the worse it becomes. I have contacted attorneys but no one's interested in taking the case.

I tried the Attorney General, and other avenues.

I think I will try some of the links you have on your blog and hope for the best.

Thanks,

Eric

still fighting the civl war 00:13  

Credit card companies and telephone companies are free from court accountability due to the elimination of the consumer's right to participate in or receive benefits from a class action lawsuit.

Anonymous,  11:54  

One day we will open our eyes to the corpocracy our country has become.

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