Earlier today, we told you about a pre-approved credit card from First Premier Bank that comes with a staggering APR of 79%. We did some digging on First Premier and found that the company is no stranger to lawsuits and predatory lending.
Consumer Affairs reports that credit cards from First Premier can come with up to $180 in start up fees. Here’s a breakdown:
* Account set-up fee: $29 (one-time fee)
* Program fee: $95 (one-time fee)
* Annual fee: $48
* Participation fee: $72 annually
* Additional card fee: $20 (if applicable)
* Transaction fee for cash advances: Greater of $5 or 3% of the cash advance
* Credit limit increase fee: $25
* Return item charge: $25
* Auto draft charge: $5/$9 per draft
* Express delivery fee: $25 for cards sent Express Mail
* Copying fee: $3 per item
* Internet access fee: $3.95
Customers are clearly outraged:
Lance: I did not read the fine print when applying for this First Premier Bank card. The credit card they offer comes with up front fees of about $180. There is also an Online Banking Fee, annual fee, and a “program fee”…or something. Basically, its a ripoff card. I have bad credit, but I’m not about to pay some random bank just to raise it by a few points.
In August, 2007 the New York Times reported on a judgment against First Premier Bank for $4.5 million:
New York consumers will get as much as $4.5 million in refunds from a South Dakota bank under a settlement of accusations that it used deceptive and illegal tactics to market credit cards to people with poor credit ratings.
The New York attorney general’s office said Wednesday that the bank, First Premier Bank, would also pay a $100,000 civil penalty and $5,000 in costs, and would change the way it markets and charges for credit cards.
The investigation was prompted by complaints from consumers who had responded to offers for a card with a $2,000 credit limit, a 9.9 per cent fixed interest rate and no processing fee.
“In reality, most consumers received a $250-$300 credit line at a 9.9 per cent interest rate that could more than double without notice,” Mr. Cuomo said in a statement. “Even before consumers had a chance to activate or use their credit card, First Premier billed $178 upfront fees for processing the credit card application.”
It doesn’t end there. Cagey Consumer has a page explaining some of the deceptive practices First Premier undertakes:
- No toll-free number for additional information The “information line” provided is not a toll-free number, thus discouraging the recipient from asking questions.
- The outside of the envelope is marked “DOCUMENTS REGISTERED: The person identified in window has been assigned the enclosed Bank Documents”. This completely meaningless statement is intended to give the recipient the impression that the person is legally responsible for reviewing the contents.
- Deceptive return address: The return address specifies that the mailing piece is from the Office of the Chief Bank Officer, suggesting that the recipient has received the personal attention of an important official of some (unspecified) bank.
Even Ben Bernanke is getting in on the action against First Premier Bank, with the Federal Reserve terminating enforcement action against First Premier Bank and its holding company, United National Corporation back in 2006:
Federal Reserve Press Release
Release Date: November 22, 2006
For immediate release
The Federal Reserve Board on Wednesday announced the termination of the enforcement action listed below. Terminations of enforcement actions are listed on the Federal Reserve’s public web site, www.federalreserve.gov/boarddocs/enforcement, as they occur.
United National Corporation, First Premier Bank,
and Premier Bankcard, Inc., Sioux Falls, S.D.
Written Agreement dated September 23, 2003
Terminated November 17, 2006
Googling around for United National Corporation yields almost no details, even searching news articles from 1990 to 2009. First Premier Bank, however, seems to be synonymous with deceit. Oh and by the way, the Iowa Department of Justice gave First Premier a lashing as well:
Attorney General Tom Miller said today that a South Dakota bank that processed electronic withdrawals from the bank accounts of Iowa victims of telemarketing schemes has agreed to adopt a set of proactive measures designed to screen out such operations and prevent facilitating fraudulent schemes.
Essentially, First Premier Bank is a company you’ll want to avoid doing business with considering its track record. Complete financial information on the bank is available at FAQs.org.