Consumer complaint received 2020-01-08
Company: Bread Financial Holdings, Inc.
State: NY
Product: Credit card or prepaid card
Sub-product: Store credit card
Issue: Fees or interest
Sub-issue: Charged too much interest

Complaint:
On XX/XX/XXXX, my XXXX XXXX credit card received a finance charge in the amount {$5500.00} under the name accrued interest charge, and on XX/XX/XXXX, my card was charged {$180.00}. 

When I contacted the issuing bank Comenity Capital, I was told that I received these interest charges because I failed to make a payment for the promotional period full balance by due date. 
However, Ive always intended to make the promotional period full payment before due date, and have made bona fide efforts and taken concrete steps to make that happen -- - before XX/XX/XXXX, I'd set up online repayment order in the full amount of outstanding balance to be posted to my account by due date ( shown on the screen of the online banking system as XX/XX/XXXX for this period ). My payment was indeed posted on XX/XX/XXXX. ( See the attached Statement XXXX ) While on the phone, Comenity informed me that the due date I used was the wrong due date ; actually, there is another due date for XXXX, but in order to see this other due date, I had to retrieve the electronic version of the XXXX statement from the online banking system, and then Id be able to see this different due date specifically for the promotional period ( See the attached statement XXXX ). 

The bank also mentioned that they had previously sent an email notification to me in late XXXX to remind me of the ending of the promotional period and remind me to pay by due date. ( See the attached statement ) There was no mention of a specific date, or any hint that this due date might be different from the regular due date the XXXX billing cycle, so I just assumed that as long as I made the full repayment by the due date for the XXXX billing cycle, I should be fine. 

I complained to the bank that the only due date shown on the screen of the online banking system is XX/XX/XXXX, and in the past 18 months that Ive had this credit card, the default due date has always been the XXXX of each month. Therefore, its entirely reasonable and natural for me to infer that Ill be able to fulfill the promotional period requirement by making full repayment by XXXX XXXX, XXXX, and thats what I did. 

The way that key information ( in this case, due date XXXX XXXX, XXXX for the promotional period ) is provided, through electronic statement only, but not through online banking system or email, is at best misleading, or more appropriately, unfair, deceptive and abusive. Given all the circumstances, this setup is like a trap, carefully designed and calculated to exploit financial consumers psychological limitations and good-faith reliance on common usage habit, attracting unwitting and unguarded financial consumers fall into an unescapable web, while ostensibly appearing to be legal. 

It may not be a coincidence, that this bank has stopped providing XXXX XXXX credit card agreement through the CFPBs website. Attached is a screenshot taken on XXXX XXXX, XXXX of all the credit card agreements under Comenity Capital Bank. While XXXX XXXX credit card is still offered to the public on Comenitys website, the agreement is not on the CFPBs website, even though credit card issuers are generally required to post the credit card agreements that they offer to the public on their websites, according to CFPB. The banks failure to fully disclose the terms and conditions of this XXXX XXXX card to the American public in a transparent manner, combined with my personal experiences, made is quite suspicious that the bank is intentionally employing evasive and crafty practices. 

When I took great pain to locate the current version of the XXXX XXXX credit card agreement and the credit card agreement provided to me back in XX/XX/XXXX when I first opened the account ( both versions in the attachment ), I noted that the current version begins with a section on electronic communication. Nonetheless, this section was entirely missing from the credit card agreement that I received back in XX/XX/XXXX. Therefore, when I opted in to receive electronic statements in XXXX, there was apparently inherent risk associated with electronic communication that the bank failed to address back then. Although the bank did update the card agreement to address the electronic communication, I didnt receive any notice of such update, at least the bank is not providing such notice through the CFPBs website. 

Last but not least, the way that XXXX XXXX credit card calculates accrued interest for the promotional period seems to be an outlier in the industry. Under the current formula, if someone missed the payment for even {$1.00} after the promotional period ends, the bank is entitled to charge the entire accrued interest during the XXXX promotional period! Thats way too punitive and harsh, especially considering most purchases put on XXXX XXXX credit cards tend to be high-dollar-value diamonds and jewelries, so interests accrued over an XXXX period can be very substantial! Ive used a variety of credit cards offering promotional periods over the years, the vast majority of credit cards do not have such harsh computation methods for accrued interests. The only other card that I can think of that uses the same harsh computation method is the red XXXX card another store credit card once issued by Comenity but is no longer offered for unknown reasons. 

In sum, Comenitys misleading, opaque and confusing communication of the payment due date caused me to set up a wrong date for my payment to be posted, thereby incurring significant interests charges. Comenitys calculation method for interests is punitive and disproportional and should be unenforceable due to unconscionability. Comenitys misleading and damaging communication and punitive interest charge constitute unfair, deceptive and abusive practices, and have caused significant damage and emotional stress on me. 

Taken as a whole, this product XXXX XXXX credit card carries significant compliance risk, operational risk, reputation risk, and legal risk, and should be stopped to prevent further hard to Americas financial consumers.

Company response to consumer: Closed with monetary relief