I had a business credit card with Advanta Bank for 2 years. The rate was variable, but fixed at x points over prime. It came to ~9% Apr.
In August I started consolidating accounts, and decided to transfer all my other balances into this account. I called Advanta, verified the "x over prime" rate (currently 8-9%), and raised my balance to within $500 of the credit limit (~$9000). This cost me ~$50/transfer, if I remember correctly.
My first bill after this transaction showed an interest rate of triple what it should have been. I immediately called in and asked what had happened. I was told I missed a due date somewhere, and they had finally gotten around to raising my rate.
I was extremely busy at work this month, and then out of town on vacation, so I paid at least the min due and said I'd get back to this - it's banking, anything is fixable, no worry. As I was at the near top of my credit limit anyway, I asked to have the account closed where I would just pay this off as quick as I could (something I learned was best when I worked in credit cards).
Now, I'm in the accounting field, and I have banking and collections experience (see bottom), and this "late payment" excuse just did not make sense. I went back through my records, and could find no late payment since this card was started. I called Advanta, and tried to get someone who could give me a more exact answer. I reiterated this whole story to at least 4 different supervisors. I called, I wrote letters, and I e-mailed. No one would reply in writing, No one would help by phone, and no one would give me a clear reason as to why this occurred.
Eventually, I got tired of this.By now it was Nov/Dec. I disputed the whole balance in an attempt to get an answer. I wrote in and said I'm not making another payment until this gets fixed. I stated that I would send a payment of $500 as soon as I had proof this was corrected (never said I wouldn't pay them - I said I did owe them once this was corrected).
I finally got an answer in Dec 04. I called in, and spoke to a girl there who finally came out with "we sent you a letter in Aug saying that we were raising your rate, and if you didn't approve, you had the right to close the account and pay off the balance at the originally agreed upon rate within 15 days of the letter." Apparently this letter was sent seperately from their bill (was never mentioned on a bill) and I never received it (if indeed it was actually sent). I asked for a copy. It looked like an advertisement for an office supply store, with this contract change written in a paragraph on the back! I don't remember ever seeing this before.
I was mad at this point. I called and wrote back that I was just notified of this, and I do not accept the new terms. They said it was too late. They claim the letter was sent the same week I did the balance transfers. The rep in Aug 04 who gave me the transfer terms never mentioned this. The rep in Sept who told me I must have missed a payment never told me this. I even closed the account ON MY OWN within a month of when this supposed letter came out (coincidental). All no good.
I considered this a breach of contract. I stopped paying them, sending them a letter every other week saying I'd pay as soon as this gets fixed. I told every collection person who called this whole story.
As for collections, they broke law after law. They called and left account info on business answering machine. They spoke to people not on the card and told them I was in collections. They refused to stop calling my home on a daily basis after I requested in writing they stop (my wife had just miscarried, and I didn't want her bothered with this on a near daily basis, as I talked to them almost every other day when they'd call my offcie). They were rude. They were condescending. They straight out lied to me at times and made threats they aren't allowed to make.
Currently, we have been in litigation since end of 2005. Even there they are playing games. They are more interested in making me continue to pay a lawyer to fight this than they are in resolving the issue. Luckily my sister, brother-in-law, and accounting clients are lawyer, and I've gotten away for free (or relatively free) up until now. I feel bad for the uninformed individual who could do this fight on their own. Advanta would win just by costing people too much to fight them.
... And so, the fight goes on. I'm still asking for exactly what I asked for from the beginning. Fix the interest rate to the agreed contract rate, and I'll pay it. Of course now I'm counter suing for harrasment as well. I'd like to see Advanta charged with breaking UCC collection code.
* Ironic foot note is that I worked for Advanta Bank collections in the early 1990's (back when it was Colonial National Bank). I was trained by them what was legal and what they couldn't do or say. I have lawyers for family and friends. That has been what has made this fight possible. A non-experienced person would have found this too costly to continue, and that's not fair to the consumer.*
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