Consumer complaint received 2023-07-06
Company: Bread Financial Holdings, Inc.
State: VA
Product: Checking or savings account
Sub-product: CD (Certificate of Deposit)
Issue: Managing an account
Sub-issue: Problem with renewal

Complaint:
Bread Savings includes the following information on its Web site XXXX XXXX XXXX XXXX ) regarding renewal rates for one-, two-, and three-year certificates of deposit ( CDs ) : CD Renewal Rates : We appreciate our loyal customers, and to show our gratitude we offer an even higher renewal rate for 1, 2, and 3 year Certificate of Deposit ( CD ) customers. You don't have to do anything to get these rates when you let your CD automatically renew. 

Product Annual percentage yield Interest rate Renewed XXXX CD 5.30 % 5.16 % Renewed XXXX CD 5.05 % 4.93 % Renewed XXXX CD 4.55 % 4.45 % ( end of excerpt ) The plain meaning of this text is that someone who holds a Bread Savings CD of one of these terms will receive the respective yield and interest rate " automatically '' by allowing the CD to renew. For example, if someone holds a Bread CD with a one-year term and a product yield of XXXX percent on XX/XX/XXXX, he or she automatically will receive a yield of XXXX percent if he or she allows the CD to renew on or about XX/XX/XXXX. 

When I spoke with a customer service representative from Bread Financial on XX/XX/XXXX, she told me that the renewal bonus of XXXX percent would apply to the yields in effect at the time of renewal and that these might not be the same as those that appear on the Web site at the aforementioned address. In other words, the renewal yield rate might be XXXX percent if the rate on one-year CDs is XXXX percent XXXX  year from now. 

I pointed out to the customer service representative twice that what she was telling me contradicted what appeared on the Web site. I read the text from the Web site to her on the phone. That text says " automatically '' and it does not refer to a XXXX percent renewal rate premium. Instead, it refers to actual renewal rates and it lists the rates for each applicable CD term. 

Moreover, it does not say, " These are example rates that would be available today, '' or " Rates may vary at time of renewal. '' While footnote 2 on the page notes that annual yields are subject to change, this conspicuously applies only to the section referring to current CDs. The section referring to CD renewal rates for loyal customers is silent on such an advisory for yields being subject to change. There is another footnote for the renewal rates, footnote 6, but it only refers to the limiting condition of applicability of this renewal rate to one-, two-, and three-year CDs. Bread Savings could have advised that the renewal rates are subject to change, but it did not do so. The fact that it did so for another section of the page provides support for concluding that the omission of this limiting term for renewal yields was intentional. Since I pointed out this issue to the customer service representative on XX/XX/XXXX, and this text on the Bread Savings Web site remains unchanged as of XX/XX/XXXX, this adds to the basis for concluding that the omission is intentional. 

Either the Web site is wrong or the customer service representative was wrong. Either way, the bank might be engaging in a deceptive marketing practice and this requires investigation and a response from the CFPB and possibly the Federal Trade Commission, U.S. Department of the Treasury, and the attorney general of my state.

Company response to consumer: Closed with explanation