We can’t count the ways that legitimate and not-so-legitimate businesses come after our pocketbooks, and how often they find our vulnerabilities despite our best defenses. Few among us have escaped being drawn in by too-good-to-be-true deals for discounts or financial deals that ended up costing us in the long run.
We shouldn’t be too hard on ourselves for sometimes losing some battles in the ongoing assault on our dollars. We’re up against a marketing industry well-armed with research on effective pitches against our cautionary instincts. And we get little protection from government, which allows important qualifiers to be reduced to print too small to read, words read to fast to understand, or online legal warnings too dense to comprehend before we check the “Agree” box on our online purchase accounts.
This leads me to introduce Paquita Rupp, a Vancouver woman who understands that the fine print defines the difference between reality and illusion in any marketing deal. She and her husband, Jim, both retirees, are careful with their money and zealously guard their high credit rating. But more money never hurts, and that’s what Comcast seemed to be offering with a mailing to their home that included an offer of a $75 prepaid Visa card.
It looked like a gift, but it required a signup with Citi, the banking giant. Paquita didn’t want an account with Citi, and she didn’t appreciate that Comcast was offering a “gift” with that string attached.
She called Comcast to see if they would direct the gift toward her monthly bill. The answer, of course, was no.
On closer look, Paquita spotted more troubling small print. Anyone who activated the prepaid card and had money left after 90 days would be paying a $3 monthly account fee. And the disclaimer left open the possibility of other fees as well. It could be that the biggest beneficiary of this “gift” would be Citi, collecting fees amost unnoticed from card recipients who also would be targets for Citi’s marketing machine.
New rules
The Pew Charitable Trust has scrutinized the prepaid card market as part of its larger examination of finance fees in the era of post-recession federal regulations of the financial industry. Pew found that the wave of federal regulatory action in response to industry excesses largely excluded pre-paid gift cards, creating an opening for new ways to gouge consumers. New rules, set to take effect this year and already adopted by much of the lending industry, eliminate the most outrages examples of excessive fees.
But don’t expect everyone to follow the rules. Last week, PayPal agreed to a $25 million settlement in a lawsuit that alleged that the company signed up customers for the credit without their permission, in the process of paying for online purchases. The company admitted no wrongdoing but accepted the settlement.
For her part, Paquita might have come out $75 ahead by simply opening the prepaid card and cashing it out before fees kicked in. But for her, it wasn’t a deal worth making. Perhaps hers is an abundance of caution, but that’s a far better instinct than ignoring that inner voice that often reminds us when something is too good to be true.
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