Consumer complaint received 2017-10-01
Product: Credit card or prepaid card — General-purpose credit card or charge card
Issue: Fees or interest — Problem with fees
Company: SYNCHRONY FINANCIAL (MA)

Synchrony Financial, issuer of the Synchrony Car Care credit card, has been charging me {$2.00} monthly fees for " MONTHLY INTEREST CHARGE PURCHASES ''.
When I call up Synchrony Customer Service each month to complain, they admit that I should not have been charged the {$2.00} fee, because that fee is only supposed to be imposed if I am carrying a NON-PROMOTIONAL BALANCE, which I am not. 

So each month I call, and they refund the {$2.00} fee, and they say it will stop, but the next month I am charged the fee again. 

This is a scam, because the fee started to be imposed about 5 months ago when, for the only time in all the years I have had this credit card, I made two purchases of gasoline with the credit card, in response to a special promotion Synchrony heavily advertised informing existing card holders that they could now get cash back by using the credit card to purchase gas ( as opposed to car care services, for which promotional deferred financing is offered ). 

At the time I made the gas purchase, I call Synchrony customer service and determined that in order to avoid any finance charges, I needed to pay the entire gasoline purchase balance in full by the next monthly due date, which I DID DO. But ever since then, I have had these {$2.00} fees imposed each month, and then when I call Synchrony customer service, they refund the {$2.00}. 

If I were a less alert customer, I would have by now had at least {$10.00} of fees assessed ( but not refunded ) to me. 

On XX/XX/XXXX, I spoke to an account manager at Synchrony Financial customer service, who investigated my account, and came to the conclusion that because back in XX/XX/XXXX and XX/XX/XXXX, I purchased a total of about {$82.00} in gasoline using the credit card, because that was a non-promotional purchase, ALL of my monthly payments were allocated FIRST to paying of promotional balances, so NONE of my payments went to paying for the gasoline ( non-promotional purchase ). 

This is a scam because NONE of the extensive advertising that Synchrony has done through the U.S. mail, email and in my monthly statements which heavily promotes using the card to purchase gasoline mentions that there will be a {$2.00} fee imposed each month until ALL promotional balances have been paid in full so that subsequent payments can be allocated to the gas ( non-promotional ) balance. 

My understanding of federal credit card law is that when a consumer makes a monthly payment larger than the minimum payment due, the amount of the " overpayment '' must be allocated FIRST to the lowest-interest balance category, NOT the highest-interest balance category. Synchrony Bank seems to have found a loophole in the law because the {$2.00}  fee is not an " interest charge '' but a fee, so they think they can get away with this hidden fee, or because the promotional purchase balance and the non-promotional purchase balance is subject to the SAME interest rate ( neither is higher or lower than the other ), so the bank seems to have discretion about how to allocate the payment. 

After many minutes of being on hold today, the Synchrony customer service manager explained that if I made an extra payment today of {$49.00}, this could be manually allocated by him to pay off the {$49.00} gasoline purchase balance remaining on my account. 

He explained that when I made the extra over payments, back in XX/XX/XXXX and XX/XX/XXXX, to pay off the gasoline ( non-promotional ) balance, those extra payments were allocated to the promotional balance which was next due to expire, rather than to the gasoline, even though customer service representatives at the time I made those extra payments assured me that those extra payments would be allocated to the non-promotional balance. 

The manager I spoke to today said that payments will only be allocated to the non-promotional balance if I had explicitly asked a customer service rep to do this and it could take one to two billing cycles for the adjustment to be reflected on my account. 

So, in essence, today the manager admitted that unless a customer takes the extraordinary action of explicitly asking a customer service rep to manually reallocate a payment to go towards the non-promotional balance, there is no way to ever pay off any non-promotional balance until ALL outstanding promotional balances have been paid off. 

While the promotional balances for Synchrony Car Care credit cards carry a hefty interest rate, and that interest is accrued from the date of purchase, that interest is only ever actually CHARGED to the customer if the customer does not make each and every monthly minimum payment on time and if the entire promotional balance is not paid off by the promotion expiration date. Synchrony Bank has gotten in trouble with credit card regulators before for not adequately warning its consumers about how this deferred interest scheme works. While I am happy to report that, because of the current federal credit card consumer protection laws, Synchrony Bank now does do an adequate ( even decent ) job of reminding its consumers about how deferred interest works, and even reminding consumers when each promotional balance is about to expire, IN CONTRAST Synchrony seems to have found a new darker corner of credit card law, in the way that they induce ( through heavy advertising and 1 % or 3 % back ) their customers to use the Synchrony Car Care card to purchase gasoline, without warning them that the ONLY way to every pay for those non-promotional gasoline purchases before the very last penny of ALL promotional purchases have been paid off is to explicitly call Synchrony customer service and ask a customer service rep to manually reallocate a payment the customer had just made. 

Furthermore, until I spoke to this Synchrony manager today and had this ( eventually ) explained to me, all of the Synchrony customer service reps I have spoken to once or twice a month for the past 5 months have given me INCORRECT information, claiming 1 : If I made a monthly payment in excess of the minimum due, the excess would be allocated to the gasoline ( non-promotional ) purchase 2. That the {$2.00} MINIMUM INTEREST FEE was an error on the Bank 's part so they refunded it Today 's information from the Synchrony manager contradicts what those earlier customer service  reps told me. 

So this is a combination of a Bank scamming its customers, and then the customer service department either lying or being incompetent when it comes to resolving reported problems. 

While today I believe I have FINALLY ( after 5 months ) been able to resolve my individual, personal, specific problem with Synchrony Bank, I fear that thousands of other consumers are being taken advantage of through their inattentiveness or ignorance. 

I feel that Synchrony Bank should 1. Ideally, automatically allocate overpayments to NON-promotional balances first 2. Or, less ideally, modify their web site so that the consumer has the OPTION of controlling how overpayments are allocated 3. Or, less ideally, be required to adequately WARN consumers of their tricky practices so consumers are adequately informed so that they can either avoid buying gas in the first place, or else perform the tedious steps to avoid being charged interest on those gas purchases UNTIL THEY HAVE PAID OFF THE VERY LAST PENNY of their promotional balances.