Here are some aspects of one offer (product code 5044-01) that came into the Cagey Consumer's hands that had been sent to one such student:

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.

false "Reply Required" marking

The outside of the envelope is marked in red with the legend "Reply Required, MasterCard Issuance Pending", falsely indicating that the recipient has a legal obligation to reply.

misleading "documents registered" legend

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.

Inadequate disclosure of mandatory fees

In addition to an annual fee of $50, there is a monthly fee that equates to $72 per year, a one-time acceptance fee of $119, and a one-time processing fee of $19. The only one of these mentioned on the front of the letter is the $19 processing fee.

No toll-free number for additional information

The "information line" provided is not a toll-free number, thus discouraging the recipient from asking questions.

Credit Card Scams (from aos.com)

Don't fall for the credit card scam being sent out by some of the credit card companies promising a credit card to help you rebuild your credit record. The offer states that you can receive a MasterCard or Visa Card with a maximum $2500 limit and all you have to do is sent a check in the amount of $29.00.

Now what you actually receive is a credit card with a $250.00 limit that has been pre-charged with an "Acceptance Fee" of $119.00, a "Participation Fee" of $6.00 and an "Annual Charge" of $50.00. The card you receive already has $175.00 charged to the card before you receive it, leaving you a $75.00 balance of available credit. In reality it is costing you $204.00 to get a credit card with a $75.00 credit limit.

The card also promises a credit increase "if you make all of your payments on time for six months and pay substantially more than the minimum amount due each month", however a "Credit Limit Increase Review Fee" of up to $50.00 is assessed if you are granted an increase. You are much better off to deal with a company like Providian Bank who also helps people to establish or reestablish credit without misleading claims and exorbitant charges.

Letters (multiplex.com [Wayback archive])
(Similar info is at www.avana.net/~jshankar/alerts1.htm [Wayback archive])

A recent (just one of many) direct mailings from First Premier offers in at least 14 pt type on the front of the mailing piece:

Guranteed unsecured $250 minimum VISA card

However, on the reverse and in 4 pt type buried in the middle of legal mumbo jumbo is:

• Processing Fee: $35.00
• Acceptance Fee: $119.00
• Monthly Participation Fee: $6.00 ($72.00 annualized)

In fact, their "fees" total $276.00 for $250 of unsecured credit.

Now, maybe this is legal, but I doubt anyone would not make the same offer of anyone else. This company obviously preys upon poor people and those who have suffered financial difficulties.

Bad Credit Card Deals Targeting Those with Bad Credit (Bank Rate Monitor)

Take the Future Card, an unsecured credit card being marketed on the Internet, offered by First Premier Bank, Sixou Falls, S.D. It carries a 19.9 annual percentage rate; a $98 one-time program fee; a $70 set-up fee; and a $5 monthly participation fee. Customers end up paying $228 in fees alone for a credit limit that could be as low as $250.

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