Consumer complaint received 2021-07-29
Company: Self Financial Inc.
State: CA
Product: Credit reporting, credit repair services, or other personal consumer reports
Sub-product: Credit repair services
Issue: Confusing or missing disclosures

Complaint:
Self, Inc., represents itself to consumers as a credit monitoring and credit building system that helps consumers with low or damaged credit increase their credit score. Self is a free credit monitoring system. But they also market credit building installment loans. This is where they make their money. 

Self credit monitoring service provides consumers with on-demand access to credit scores, however, the information is usually outdated by several months. It provides consumers access to this outdated credit history at all times. Self also provides consumers with advise on how to improve their credit. They provide this advice free of cost.

However, do not provide consumers with advise or actual notice of how Self, Inc. services could actually damage your credit history under the following conditions : ( 1 ) Consumers paying the last payment off early may negatively effect their credit history and negate the entire purpose of the installment loan, or ( 2 ) Return of CD funds at maturity of the installment loan will be compromised by the acceptance of the credit card offered by Self, Inc. or ( 3 ) Self, Inc., will be holding in abatement up to {$370.00} as a security deposit on credit card account, and will not return all of the CD funds at maturity, unless or until, the consumer accepts that all of the benefits of the installment loan are negated and both accounts are reported as closed.

Such reporting by Self, Inc., damages the consumers credit profile and will negatively impact consumer like me for up to 10 years.

Selfs material failure to provide consumers with actual notice of the change or amendment to one of the fundamental terms and conditions contained in the agreement, i.e., Return of CD at maturity in full has now been effected by consumers acceptance of the credit card offered. This is unlawful as it is in direct contravention to substantive principles in consumer protection laws and contract law in general.

In other words, the consumer is now subject to double-jeopardy due to the credit card account holding CD funds as security deposit without any actual notice provided, and without the knowledge or consent from the consumer. It is FDIC Insured CD funds misappropriated for a credit card security deposit. The CD funds which can not be accessed by the consum
er until maturity date is allocated by Self for the security deposit on credit card without notice to the consumer.

These specific changes by Self, Inc., to the terms and conditions of the agreement transformed the agreement between me and Self, Inc, into to a contract of adhesion. I did not know that the credit card offered would negatively effect the return of my CD upon maturity as promised.
I discovered this fact when I received only {$160.00} of the CD at maturity instead of {$540.00}. When I inquired about the return of the balance of the CD {$370.00}. Selfs response was simply to say okay, we will start processing the return. I did not know and was not provided actual notice that in order to return the entire CD amount required the closing of the credit card account.

Selfs solicitation to consumers involves the following terms and conditions : For XXXX/month, consumers can rebuild credit. The Self loan isn't your typical loan. It is a loan in reverse. Consumers don't receive the proceeds from the loan upfront. Instead, it's placed in a FDIC insured Certificate of Deposit. The maturity date equals the term of the loan.

You then make payments over the course of the term of the loan ( 12 to 24 months ).

Your payments are both principal and interest. At the end of the term, the CD matures. You receive the principal, plus the small amount of interest it gained during that time.

As you make payments, Self reports them to XXXX, XXXX, and XXXX. If you make your payments on time, this will help build up your credit score.

Once you provide this information, Self runs a check on XXXX. 

Similar to running your credit, this system checks your bank account history. This keeps an eye on how you treat your bank accounts. They look for overdrafts and bad checks. However, unless you let your overdrafts sit unpaid, you should be in good shape. 
If your XXXX  report comes back clean, Self will ask you which loan amount you want from a predetermined list of options : {$520.00} ( {$25.00} paid over 24 months ) {$540.00} ( {$48.00} paid over 12 months ) I selected this one!

{$1000.00} ( $ XXXX  monthly payment over 12 months ) {$2200.00} ( $ XXXX  monthly payment over 12 months ) You then enter your payment information. You can use a checking account or debit card. However, using a debit card will cost you an additional 2.99 % plus {$0.00} as a convenience fee.

Self also charges an administrative fee based on your loan amount. It varies between {$9.00} and {$15.00}. The fee is non-refundable, but is a one-time fee. The moment you take out the Credit Builder Loan, you have a FDIC-insured Certificate
of Deposit opened in your name. Like any other CD, you can not touch the money until it reaches maturity. In this case, it's 12 months. Untrue.

The bank deposits the full amount in the CD, allowing it to earn 0.10 % interest over the next 12 months, then returned to the consumer. Also untrue.

It is in the publics best interest and in the interest of consumer protection that Self is held accountable for failing to provide consumers with actual notice as follows : Consumers paying the last payment off early may result in negative credit history reported on your credit profile, even if Maturity date is reached. And will also negate all of the benefits of the installment loan.

Return of the CD at maturity will be compromised by the consumers acceptance of the credi
t card offered due to a security deposit held on account, and taken out of CD funds prior to maturity. FDIC rules do not apply.

Prior to offering credit card to build credit history : Self intends on utilizing or accessing or apportioning a substantial part of your FDIC Insured Certificate of Deposit Savings Account beyond date of maturity or subject to additional terms and conditions not previously disclosed to consumers, i.e. consumer must accept the negative reporting of the credit card account as a closed account on the consumers credit file that will negatively effect the consumer for up to 10 years. 

WARNING : Do not pay the XXXX XXXX XXXX early even if offered by Self. If you pay it off early, you negate the benefits of the installment loan. You can not touch the CD until maturity or you risk paying a penalty, however, Self can and will at any time for credit card deposits without any notice or consent to consumers.

Company response to consumer: Closed with explanation