Credit Card Firm Cut Limits After Massage Parlor Visits, Feds Allege

CptSternn · 06-22-2008, 01:50 AM

http://blog.wired.com/27bstroke6/200...-card-fir.html

Government regulators are suing a sub-prime credit card issuing firm, alleging that the company secretly profiled its customers' transactions and reduced the credit limits of those who used the cards at bars, marriage counselors and tire retread stores.

The Federal Trade Commission filed the complaint against CompuScore in a federal court in Atlanta on June 10, alleging the Visa-card marketing service routinely abused debt collection law, failed to disclose hidden fees, and withheld the credit limits it promised to subprime borrowers.

Most intriguingly, however, the complaint (.pdf) alleges that CompuScore kept track of the kinds of purchases its card holders made, without adequately explaining they were doing so or what kinds of purchases would lead to lower limits.

CompuCredit has based these credit line reductions on an undisclosed “behavioral” scoring model that penalized consumers for using their cards for certain types of transactions, including transactions touted in their solicitation materials such as cash advances and transactions with the following types of merchants

• Direct marketing merchants
• Marriage counselors
• Personal counselors
• Automobile tire retreading and repair shops
• Bars and night clubs
• Pool and billiard establishments
• Pawn shops
• Massage parlors.

The FTC is not suing because it believes the practice is illegal. Instead, the regulators contend that the company wasn't forthright about what it was doing.

Has anyone heard of any other credit card companies doing the same? If so, THREAT LEVEL intends to be paying with cash or a prepaid debit card a whole lot more in the future.

CptSternn · 06-22-2008, 01:53 AM

Heh - it's funny credit companies now are basing your rating on what you buy. Go to a night club, get a lower rating. Marital problems? Thats a lower rating. That list is kinda funny. I mean, they are penalising people who don't fall into the working class type of structure. Any such charges on your account and you obviously have a lower net-worth.

People who use direct marketing (i.e. buy shite off telly ads) obviously don't know how to manage money so they should have less credit.

Of course, their is a bit of reason and logic to this sure.

KontanKarite · 06-22-2008, 08:11 AM

Holy shit. Fuck that company outright. Burn their ass to the fucking ground.

CptSternn · 06-23-2008, 01:09 AM

Heres the problem - there are 3 (or were three, might be one or two more) companies that set credit ratings in America. All VISA cards go through this company. All Mastercard, Discover, etc. all have one company as well. The companies collude together to share info and work as a oligarchy of sorts.

If you have a credit card, then there is nothing you can do.

KontanKarite · 06-23-2008, 01:23 AM

Quote:

Originally Posted by CptSternn

Heres the problem - there are 3 (or were three, might be one or two more) companies that set credit ratings in America. All VISA cards go through this company. All Mastercard, Discover, etc. all have one company as well. The companies collude together to share info and work as a oligarchy of sorts.

If you have a credit card, then there is nothing you can do.

The hell there isn't.