Consumer complaint received 2018-01-01
Company: Bread Financial Holdings, Inc.
State: IA
Product: Payday loan, title loan, or personal loan
Sub-product: Personal line of credit
Issue: Charged fees or interest you didn't expect

Complaint:
I obtained a line of credit from Paypal in the beginning of XXXX to make a singular, particular purchase. Paypal offers a promotion for obtaining credit, " Paypal Credit ''. Right on the webpage, they have this statement : " When you need to buy something, you dont want to wait. With PayPal Credit, you can enjoy special financing offers like this one : No Payments + No Interest if paid in full in 6 months on purchases of {$99.00} or more. Buying with the power to pay as you choose and still enjoying the security and reliability of PayPal ... now thats magic Interest will be charged to your account from the posting date ( which is usually within a few days of the purchase date ) if the purchase balance is not paid in full within 6 months. Subject to credit approval. See terms. 

I made the purchase promptly after obtaining the credit, which the application process had its own disappointing issues. When the statement was made available a few weeks later, I was expecting the promotion details to be stated on the statement. There were no details about my promotion, my charge was listed as a " Standard Purchase ''. It was not clear at first why no details of my promotion were not listed and it wasnt clear to me what a standard purchase was supposed to mean. But on the surface, things seemed ok because this was not a cash advance, it was not a balance transfer, it was an ordinary consumer purchase to a vendor that was conducted online. Inspecting the statement carefully, the fine-print on the back of the statement had language about promotions and deferred interest saying : " There is one type of Deferred Interest Purchase : No Payments + No interest if paid in full in 6 months Purchases : Deferred Interest Purchases on which no payments will be due during the six-month deferred interest period. 
If you pay the balance on a Deferred Interest Purchase in full by the Expiration Date, we will not charge any interest for that Purchase. We will calculate the interest for each Billing Cycle prior to the Expiration Date and disclose it on the billing statement as the Accrued Deferred Interest. If you do not pay the balance in full before the Expiration Date, ( 1 ) we may charge your Account, in the Billing Cycle in which the Expiration Date occurs, interest on that Promotional Purchase from the transaction posting date at an APR of 19.99 %, and ( 2 ) any remaining balance will be treated as a Standard Purchase beginning on the Expiration Date. '' There was also language for a " Standard Purchases '' on the back of the statement, it stated : " You can make a Standard Purchase using this Account by choosing the PayPal Credit Payment System when you make a purchase from a Merchant at a website, by telephone, or at another authorized location. We will extend credit to you, in the amount of the Cost of the Purchase, by paying the Merchant on your behalf. '' So it did not clarify that my purchase would not be interest-deferred and I had no reason to expect that the interest would not be deferred provided I paid the balance in 6 months. 

So I contacted PayPal and they told me that the promotion does NOT apply to my purchase and it was incumbent on me to determine beforehand if this was a " qualifying purchase '' by contacting the vendor. What was clear from the beginning was the statement, With PayPal Credit, you can enjoy special financing offers like this one : No Payments + No Interest if paid in full in 6 months on purchases of {$99.00} or more. What was NOT clear was that purchases are not all considered equal. It was also not clear to me that *I* had to contact the vendor before making the purchase to see if their purchase would apply under another partys financing promotion and terms. That would mean having to contact a third party to find out if the sale of their merchandise qualifies with the bank ( Paypals financing terms ) as a promotional-eligible purchase before even bothering to go through the entire application process for obtaining Paypays credit. But this is also under the assumption that some random vendor would know intimately Paypals policies and processes for extending credit and exactly how their promotions work. That would also be like two complete strangers have agreed to extend credit/financing from one to the other and the second is paying me their money, and I am completely privy to the terms of their lending. Does Paypal not realize that most people are neither mind-readers nor prophetic, even over distances?

So I appealed to the logic that their marketing did not state that only certain purchases or a limited pool of vendors would apply for this promotion. I also pointed out that it was not clear that the client needed to do this research beforehand and it was not logical that the third party would necessarily know Paypals promotional policy. The point that their promotion allowed for deferred interest on the contingency of paying the entire balance within six months was the entire purpose of inquiring for their credit and I asked them to extend the promotion to this on the basis of their ambiguity, calling out the marketing as deceptive effectively impossible to discern as they state. We have gone back and forth a couple times and their responses have been part adamant and part unintelligent as they refuse to acknowledge the ambiguity of the language in their marketing and the statement fine-print.

Company response to consumer: Closed with explanation