Providian credit card - account sold to MYCARD - then interest rate increased to 25.99 percent

Complaints.com received the following on March 8, 2003:

From: Keith Gowton [Email User]

RE: Providian credit card - account sold to MYCARD - then interest rate increased to 25.99 percent

Credit Card Company Practice of dumping “high risk” accounts

Office of Comptroller of Currencies

Customer Service Group

1301 McKinney Street

Suite 3710 Houston, TX 77010 To whom it may concern: I am inquiring whether the practice of “dumping high risk accounts” is a legal practice. Can companies like Providian dump “high risk” accounts to predatory Credit Card Companies like MYCARD charging rates of 25.99 percent up to 35 percent for accounts in good standing that were averaging 18.9 percent? This past month I received a notice from MyCARD that they where changing the terms of agreement on my account and that if I wanted to continue to use the account my APR would change to 25.99%. I ignored the notice because I am not using the card and in fact have been paying down the balance since July when the account was held by Providian. [In fact I was in a debt-consolidation program at the time with Ameridebt. I terminated my agreement with Ameridebt in December 2002 after a dispute regarding their non-payment or distribution to my creditors in September of 2002. Here is another company that is a consumer nightmare- Ameridebt. They decided not to make a payment distribution to my creditors and didn’t bother to tell me causing me to be late in payment on 7 accounts. My accounts were in good standing up to that point]. Anyway, I did not think the notice applied to me because I am not using the card. I notified Providian in July that I wanted to close the account and would be paying down the balance. The transfer includes a notification from MYCARD, giving account holders the “option” to opt out if they do not want to pay the 25.99 percent. Cardholders were informed that they could transfer the balance to another account or pay off the balance. You know as well as I, and Providian and MYCARD know, the only option for most card holders is to be forced to pay higher interest rates.

We are not likely able to transfer the balance to another account nor can we pay the balance off in one payment. This practice is intentional to force cardholders to higher interest payments. These are the same folks who complain that bankruptcy laws are too lenient. If this practice is lawful then a law is needed to protect consumers from predators like them. This may not be consumer fraud by law but it certainly violates the spirit of the law and it preys on “high risk” credit card holders. I don’t imagine I will get a lot a sympathy but I have been paying my accounts on time since I filed for bankruptcy in 1997. My rate went from 12 percent in February to 25.99 percent in March. Please advise me of my rights or recourse if any. Thank you in advance for your assistance. Kenneth Gowton Email User Note: If you have similar experience or complaint...please email me and send a letter to the Office of Comptroller of Currencies, they regulate the Credit Card Companies.