Direct Merchants

Discussion in 'Credit Talk' started by rick, May 4, 2001.

  1. rick

    rick Well-Known Member

    Here's an interesting post: Friday, May 04, 2001

    Direct Merchants Credit Card Bank N.A., the Scottsdale, AZ-based card-issuing subsidiary of Metris Companies Inc., will pay $3.2 million in restitution to 62,000 credit card customers as part of an agreement reached yesterday with the San Francisco bureau of the Office of the Comptroller of the Currency. An OCC spokesperson adds, however, that the office also may assess civil penalties against Direct Merchants Bank. "We have not set a timetable as to when we may take additional action," the spokesperson tells CardFax today. The case involves Direct Merchants Bank soliciting customers by using two schemes the OCC calls "downselling." Direct Merchants mailed potential cardholders offers advising them that they had qualified for an unsecured credit card without a processing fee. Instead, some new cardholders received a card that required a $79 processing fee in addition to an undisclosed monthly fee. In a second scheme, potential customers responding to the same offer received a partially secured credit card. Direct Merchants Bank required the customers to pay a $30 annual fee and to deposit $99 into a bank account to secure the card. Direct Merchants also imposed a higher interest rate on those customers, the spokesperson says. The company solicited 13.5 million customers with the card offer between March 1, 1999 and June 1, 2000, a Metris spokesperson says. "Today's agreement put these issues behind us and enables us to get on with the business of offering quality credit products and services for moderate-income consumers," Patrick J. Fox, president of Direct Merchants Bank, says in a statement. Metris, which is based in Minnetonka, MN, will pay the customers either with a credit or check in 90 to 120 days, the Metris spokesperson says.
  2. greyfox

    greyfox Well-Known Member

    Does this mean that if we had a secured card with DMB we will benefit from this?
  3. MikeB

    MikeB Banned

    I hope so. I closed mine, but left a balance on it just in case. I won't hold my breath.

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