FTC slams Platinum Trust Card
Writing in The Philadelphia Inquirer on Feb. 19, Jeff Gelles told the sort of tale that leaves many people’s blood boiling. It concerned Bill Losse, who’s now retired but used to be a corrections officer in New Jersey, and a call he received one day from a company that offered him a financial lifeline. Like many who were contacted by telemarketers working for that company, Bill had recently applied for a payday loan. When he took that call, he desperately needed new tires for his car, but had no way of paying for them.
The telemarketer told him about the Platinum Trust Card, which, she said, was comparable with an American Express card. In exchange for an upfront fee, and a monthly charge of $19, he could have a credit limit of up to $10,000. The card also could help rebuild his credit score, she claimed. Bill couldn’t resist the pitch, and signed up.
Credit cards that aren’t credit cards
However, when the plastic arrived, it proved to be very different from those issued by American Express or any other mainstream credit card companies. According to a Federal Trade Commission (FTC) press release of Feb. 3:
…the defendants do not report to credit bureaus, and their “credit cards” only access an online store the defendants operate, which offers a variety of off-brand, outrageously overpriced products, most of which can be purchased only in bulk quantities. Examples of items for sale in the defendants’ store include a case of 3,240 “dolphin shaped craft embellishments” for $356.40, a case of 432 shower caps for $430.56, and a case of 144 “play flutes” for $573.12.
Even those who, for reasons beyond the comprehension of mere mortals, bought from that site found their four- or five-figure credit limits largely illusory. Customers complained of money being siphoned from their bank accounts pretty much at the whim of the company.
Poor Bill. The FTC says that the standard upfront fee was $99, and that Platinum Trust Card (and possibly associated companies) had relieved similarly hard-pressed consumers of some $4.82 million or more over the previous three years. In one recent two-month period, some 10,000 cards had been issued.
Small wonder, then, that, in the words of the press release: “At the request of the Federal Trade Commission, a federal judge has temporarily halted a telemarketing operation that allegedly sold bogus credit cards and took money from consumers’ bank accounts without their consent.”
Differentiating the best credit cards from the worst
It’s hard to feel anything other than sorry for Bill, but in truth he ignored the three golden rules that apply whenever considering credit card offers:
- Like other unsolicited offers, if they seem too good to be true, they probably are.
- Read credit card applications/agreements before you sign them.
- Check out online credit card companies you’ve never heard of.
That last one can be very powerful. Your blogger just Googled “Platinum Trust Card,” and found the first page of results dominated by consumer sites and complaints boards warning about the company. Some of those complaining referred to the offer as a “con.” The very first result was the Better Business Bureau, which awards Platinum Trust Card an “F” rating, the very worst possible on its scale. Admittedly, this search was made about three weeks after the court ruling, but many of the BBB complaints, and warnings on other consumer sites, predated that.
Of course, many of the poorest and most vulnerable people lack Internet access and often computer skills. So this isn’t a plea for a tougher imposition of caveat emptor (let the buyer beware). But if you’re reading this online, you can check out offers online. Don’t hesitate to do an online search if you have any suspicion that an offer you’ve been made may not be one of the best credit cards.
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