Consumer complaint received 2024-03-05 00:00:00
Product: Credit card — Store credit card
Issue: Fees or interest — Unexpected increase in interest rate
Company: Bread Financial Holdings, Inc.
State: PA

Complaint narrative:
Here is the letter I sent to Comenity : I just got off a call with a customer service representative at Comenity Bank who suggested I place a formal Billing Dispute with you. 

In the fall, my husband and I made several purchases at Ballard Designs for an upholstered chair, a couch, and loveseat. In XXXX of XXXX we were billed for the first delivery for {$1200.00} and {$1400.00}. XXXX. We had signed up for the Ballard Designs Credit Card, because it seemed like a good deal to spread out the payments with XXXX interest and we planned to pay off the purchases before the end of the year. We set up a regular payment of {$280.00} a month so that by the end of the year we would have paid off our purchases without incurring interest. On XX/XX/XXXX of XXXX, the remainder of our purchases arrived and we were billed {$4600.00}. Unfortunately, we were ignorant of the necessity of increasing our monthly payments- this was partially due to difficulty accessing our online account and not receiving any kind of written notification, compounded by my husbands sudden illness. 

In XXXX of XXXX, my husband was diagnosed with XXXX XXXXXXXX and was at that time in XX/XX/XXXX receiving daily XXXX treatments. In XXXX, my father passed away and in XXXX, my husband had XXXX XXXX, including an XXXX, and throughout the summer and into the fall he received XXXX treatments and then at the end of XXXX had another XXXX XXXXXXXX. Prior to my husbands XXXX, I fell and broke XXXX XXXX XXXX XXXX in XXXX places. 

With these events as a backdrop, I continued to receive my regular emails informing me of my regular payments to Comenity, and as I knew we were making regular payments, I assumed we were in good standing. The statements always said " Minimum payment due '' and as we were paying more than the minimum, I assumed the " minimum '' referred to what we needed to pay to avoid any penalty or interest. Then recently when my husband asked if our payments were ending soon, because he assumed we were almost done, I tried again to access my account through our link on the email and was unable to do so. It took quite a bit of time navigating the online automatic messages on Comenity 's phone service to access a real person who could help me fully access my on-line account, at which point I was shocked to discover the thousands of dollars of interest that had been applied to our account. 

What is egregious and negligent on the part of Comenity is that in none of these messages was there any alert to the upcoming change in our account where the back interest, at a usurious rate of nearly 30 %, would be applied. Prior to this, I had tried to log into my account, however, when I requested my username and password it said I needed my account number and on the emails you only give the last XXXX digits of the account number ; when I tried those numbers, I was still denied access. In fact the full number on the account is quite difficult to find. The deception and negligence on Comenitys part is as follows : 1. At Ballard Designs at time of purchases, it was not stressed that the deal we were receiving would turn financially punitive in nature, if we were to miss the deadline for payment in full. Nor was it stressed that the interest would be retroactively applied. ( I recently spoke to a salesperson at Ballard Designs in XXXX of XXXX and she was shocked that the interest to my purchases was retroactively applied to the point of incurring {$2000.00} in interest- if an employee is this surprised it again indicates that the people who are encouraging customers to take these promotions are themselves ignorant of the possible consequences to their customers. ) XXXX. The emails approaching the end of year date should have included an alert that payment in full was due. 
XXXX. The emails should have made it easier to access the account, by at the least, including the account #. Creating an account with so many barriers to access ( even when Ive provided my SSN # ) is a huge impediment to fair communication. 
XXXX. The idea of retroactively applying an interest rate of 30 % also is clearly a predatory practice which is targeted in an article on the Card Act of XXXX in XXXX XXXX. I quote : XXXX stores often offer no-interest promotions on purchases if consumers pay off the balances before the promotional period endsthink, buy now, pay later. 
The XXXX XXXX XXXX XXXX wants to see this practice end. It views this type of financing as a hidden trap. 
If the consumer does not pay off the entire balance by the end of the period, she will be hit with a huge retroactive interest charge for the entire balance, including amounts that have been paid, the organization stated in comments submitted to the CFPB in XX/XX/XXXX. Furthermore, They are inherently unfair, deceptive and abusive, and violate the rule in the Credit CARD Act against retroactive interest charges. 
On a XXXX a user, who appears to be a lawyer, commented : Comenity Bank deceives customers into signing up for deferred-interest promotional credit cards without disclosing the true interest rate. To entice customers to sign up for its store-brand credit cards, Comenity Bank offers a misleading 0 % APR interest period. Many consumers are unaware that they must pay off their full balance before the promotional period ends. Even if they only have XXXX payment left on an item, consumers with a balance are charged interest for the entire promotional period, typically XXXX XXXX XXXX months. This confusing and unfair deferred-interest program burdens consumers with charges that can add up to XXXX to 3 times more than the original cost of an item. 
This is a fair account of what happened to my husband and me. We were not made aware of the hefty interest rate that would be applied retroactively, and as I mentioned above we should have been alerted via e-mail or XXXX mail that the deadline of our promotion was ending. The nefarious aspect of this promotion is that Comenity is able to take more than the amount earmarked for a monthly payment out of ones bank to meet what is their minimum payment due ( which they did for a few months ) but it is not made clear to the consumer that this minimum payment is in Comenitys self-interest and not the consumers. 
I am therefore requesting that the added interest amounts of {$690.00} for XXXX purchase and {$1300.00} for the other ( a total of {$2000.00} - when all that we owed by the end of XX/XX/XXXX was {$3500.00} ) be removed from the bill. I have today made a payment of {$3500.00} to cover the cost of our merchandise, which I would have done in XXXX, had I been notified of the balance due date. 
Again, what I need to emphasize is that Ballard Designs and Comenity owe it to their customers to simply alert them to the upcoming alteration in their financing agreement, even if it was XXXX that was agreed upon a year in advance, and not doing so is blatantly negligent. ( The additional obstacle of making logging in to the online account burdensome and obstructive is also a piece of this predatory practice. ) Note that I am inundated with advertisements and deals for merchandise daily ( I have received XXXX sales and ad messages from Ballard Designs and XXXX XXXX, a sister brand, since XX/XX/XXXX of XXXX ), but when it comes to a simple courtesy email informing me of the risks to my account, I received nothing. This is why it is a deceptive and predatory policy. Its as if Comenity Bank is counting on people to make this error, and when life circumstances occur to add an additional layer of stress or complication, they know these errors will occur. 

I assume that you and Ballard Designs would like to maintain good relations with loyal customers and would therefore be willing to work with us to resolve this matter. I thank you for your attention to this matter and look forward to a speedy resolution.

Company response to consumer: Closed with explanation