Wednesday, January 25, 2012
Bank of America Elite Credit Cards
Dr. Elizabeth Warren:
I want you to be aware of my recent personal experience with Bank of America with regard to their credit card practices that may influence the way you approach changes to the credit card agreement issues. To me this is a new wrinkle on the abuse that consumers are going to start seeing more of in the months to come. For my own part, I think I have an almost satisfactory outcome as a result of the complaint I filed with the Office of the Comptroller of the Currency, who oversee National banks, which Bank of America is. It was only by luck that I caught this one in time. That, combined with some aggressive action on my part. However, I fear that for tens of thousands, if not hundreds of thousands, of other credit card holders they might be taken advantage of with this new abuse by the Banks.
As I understand it, and I may be wrong on this point, the new Federal regulation that effects credit card agreements does NOT cover the benefits associated with the cards (this is what I have been told by the Bank of America). So, for example, in my case, when the issue concerns a blatant abuse of the rewards benefits component of the agreement there is no change to the protection for the consumer.
Let me go through the sequence of events that I encountered to explain the abuse that I am seeing.
I had called customer service for the credit card company with regard to how a credit I was receiving from a merchant was going to be handled. That matter was satisfactorily answered by the customer service representative. While on the phone I asked about my rewards benefits. It was at that time i was told that the rewards program that I had had for the preceding 15 years was being terminated and that I had received a letter on August 16 explaining all this and that October 29 would be the last date to accumulate points and November 15 would be the last date to redeem points. After that date all remaining points would be forfeited.
I was further told that the letter that I allegedly received on August 16 also reduced my benefits by 25% immediately. Two points worth noting here. First, my bills and all notices are sent either electronically, or through the mail to a lockbox to a bill paying service. The bill paying service had no record of a bill or notice having been received that concerned the matter at hand. Second, having saved those rewards points for 15 years, only to lose 25% of the benefits without notice seemed a bit harsh.
On a subsequent call to the customer service center I was informed that, in fact, no letter was sent to me, but that according to the agreement, no notice was required, and so, the mere change in the plan was allowed at their whim, without any notice to me. Upon hearing this, I sent off a complaint to the OCC.
Subsequently, I received a telephone call from the office of the CEO of Bank of America as a result of their receiving a copy of the complaint to the OCC. They explained to me exactly what I had been told previously, except that my rewards points must be redeemed by October 31 and NOT November 15 as I had been advised by the customer service representative. I explained, that I had no problem with them canceling the program, but that I did have a problem with them taking away 25% of the benefits I had saved during the previous 15 years without any notice whatsoever. They again reiterated that they had sent a letter, but that under the terms of the plan no notice was required. They indicated that they could "do something" to resolve the matter at hand with me by increasing the number of points I have, but that I would have to pick out a benefit that I wanted, and, if it wasn't too excessive, they would make up the difference. That may solve my problem, but what about all the other victims that were out there who didn't pick up on this change?
I called the customer service number one last time to make sure that the last date for redemption was October 31 as I had just been told by the CEO's office. I was told emphatically that it was November 15, and, upon further investigation, my particular plan was not being eliminated, and that is why I never received the letter. I was further told that the reduction in benefits notice was on my monthly statement. I carefully checked all the statements and found no such notice.
I spoke again to the office of the CEO and explained the apparent discrepancy between the various personnel. I was then told that they had made a mistake and that the last date for redemption was, in fact, November 15 as I was originally told, and that they would check the allegation that my plan was not cancelled and therefore there would be no deadline for redemption of the benefits or suffer forfeiture of those benefits.
They also agreed to make up the difference from the reduction of benefits, IN MY CASE.
Upon further conversation they have now offered me a $100 gift card for my trouble and loss of benefits, which is substantially below the benefits I lost as a result of the reduction of benefits that they unilaterally enacted without notice.
I have now sent a further letter of complaint to the OCC on this matter.
Let me put the problem in a nutshell: They say they do not have to notify me for a change in the agreement for benefits (which is part of the agreement, as far as I am concerned). However, they are playing a real shell game with this. Since they do not post the benefits anywhere they can say at any point to anyone anything they want as to what the benefit plan is or was on any given date. What kind of an agreement is this. They can change it retroactively without notice and without even recording any changes until they need to change the rules. This is Alice in Wonderland.
Clearly, there are many tens of thousands of other cardholders who won't be so lucky as me in this type of situation, but more importantly, it points out a real flaw to the regulations that permit banks to do these kinds of film flam scams.
Please see that upcoming regulations do not permit the credit card companies such unilateral power on such matters without any notice whatsoever.
cc: Brian T. Moynihan, President and CEO, Bank of America, 100 North Tryon St. 18th Floor, Charlotte, NC 28255
Comptroller of the Currency/CAG
1301 McKinney Street
Houston TX 77010
Re: Case# xxxxxxxx
As a result of my complaint to you of September 16, 2010, the above captioned case # has been assigned. Subsequently I was contacted by Ms Shameikia Riddle from the Office of the CEO and President of Bank of America. She informed me that, in fact, I received a letter that was sent sometime in early August explaining that my program was ceasing to exist and that I had until October 30 to redeem my points (not the November 15 date I had been given earlier by the Elite Rewards customer service personnel).
I called Elite Rewards customer service to verify the information for the third time and was informed that, in fact, my program was not being discontinued and that is why, contrary to what I was told earlier by Elite Rewards and Ms Riddle, I was NOT sent the letter in the first place (this conforms with my original statement that I never received a letter from Bank of America on this subject). Further, they pointed out that for those individuals where the program was ceasing the last date for redemption was still November 15 and not October 30 as was explained to me by Ms Riddle. However, they did point out that my reward benefits were reduced by 25% without notice, and that according to their agreement with me they are not required to give me notice.
In a subsequent conversation with Ms Riddle she confirmed her misstatement of the deadline for the redemption of the points. I explained the part about my participation not ceasing, and in a still further conversation Ms Riddle conceded that she was also wrong on that point also, and that my program was not ceasing to exist.
So, after being given all the misinformation, the only remaining issue was that I was not notified about the reduction of rewards benefits. She reiterated that no notice is required. She has offered a $100 gift card to compensate me for my loss. In my particular case, the reduction of benefits resulted in a reduction of benefits equal to $200 in cash equivalents.
If, as the Bank alleges, there is no notice required, then there must be some place where, for a given date, one can inspect the current program rules to determine the benefits. If thiswere not the case then the Bank could say anything it wanted to and it would not be verifiable.
Given the state of confusion at the Bank with regard to the program and its benefits I would say that their claims to me have been outright lies and the current situation is a cover-up. The Comptroller of the Currency should not allow such scams to be perpetrated upon the public, Bank of America has probably defrauded tens of thousands of customers with shell games like this one and should be sanctioned for its actions in some tangible form.
As per your email, while you state that I should be expecting a written document from the Bank of America, Ms. Riddle has told me that she will only communicate with me over the phone and not in writing. I felt compelled to state my understanding of the circumstances to you in writing at this time, and that their proposed solution is unacceptable to me and that their flim-flam practices have probably adversely affected tens of thousands of credit card holders and should be stopped.
cc: Ms Shameikia Riddle, Office of the CEO and President of the Bank of America, PO Box
52302, Phoenix, AZ 85072