Vegas "Credit Card" Business Makes Fat Money from Fine Print

by Mike Bevel CollectionIndustry.com

Sadly, there is no Olympics or World Cup for the Worst Credit Card Ever. If there were, however, it would be pretty tough to beat Capital Credit Alliance?s stunner of card.

You might disagree at first. ?It?s pre-approved,? you might say. ?No interest!? And yet, upon a closer gander:

• It?s not a credit card. It?s credit card-shaped. It fits in a wallet like a credit card. However, CCA?s card can only be used to buy CCA stuff from CCA?s overpriced catalog.

  
  

• There?s a $199.00 activation fee ? charged to your bank account if you don?t cancel the card within two weeks of activating it.

  
  

• On top of the $199.00 activation fee, there?s a $198.00 annual fee the first year which drops to $99.00 for all subsequent years. That?s provided you make it through the first year of pseudo-credit-card bliss fiscally unscathed.

  
  

• There are also two additional hidden charges that CCA tries to spin as ?annual benefits.? One allows the cardholder to defer payment for up to 6 months in the case of unemployment. The other allows payments to be waived on items that are stolen within 30 days of purchase. Both are $99.99 each, and you?ll be charged for them unless you notify CCA in writing that you do not want these great benefits.

Your first year of membership into this exclusively awful club will run you about $600.00 — before you?ve even made a purchase from the catalog. Times are rough enough for consumers without mishigas like CCA?s card. Industry watchdogs and the FTC, fortunately, are on to these guys.

According to a story running in the San Francisco Chronicle, In 2000, William Shane Kelly ? the company?s president, secretary, treasurer, and director; not since Barbra Streisand has there been this much involvement from one person ? agreed to pay $150,000 to settle charges from the FTC that he’d engaged in deceptive business practices.

The FTC said Kelly was part of a Las Vegas operation that led consumers to believe they were receiving a line of credit but in reality were being required to buy goods from a catalog. Between 1996 and 1999, more than $12 million in fees reportedly were collected from 80,000 consumers.

“These credit cons are especially contemptible,” an FTC official said at the time. “The FTC will not tolerate such blatant illegal activity by any lender.”

Kelly has some supporters, most notably in Nevada bureaucrat Jack Lund Schofield, who told the Chronicle, ?I saw that the company had great potential. They’re very successful today, thanks to some of my suggestions about what they should do. I take credit for guiding them along so they can do the right thing.” He also suggested that some of the complaints against Kelly were trumped up or exaggerated.

Which may be the case. And yet, taking another gander at the list of initial charges, it?s difficult to see CCA in a laudatory light.