Advanta Settlement Checks Arrive...With A Thud

Posted by: John Tozzi on September 28, 2009

Some Advanta cardholders are receiving checks from the company’s $35 million settlement with the FDIC over steep rate hikes. A reader Deborah writes in a comment:

My interest rate was raised to 34.99% almost a year ago. I had been at around 16% or 17%. Today I got a letter from John F. Moore, President, Advanta Bank Corp., with a check in the amount of $36.95 attached. This is apparently the result of the settlement Advanta reached with the FDIC regarding Advanta’s “Repricing Event,” which they state occurred between 6/1/07 and 12/31/08. The check is valid for only 120 days, and it states very clearly that by accepting and cashing the check, the payee is agreeing to release Advanta and its parent and subsidiaries from any further action. I still have an outstanding balance with them, on which I’m paying this egregious rate, and would like to know what recourse I might have. I don’t intend to cash the check, as $36.95 doesn’t come close to two months’ interest. But I can’t sit still and watch them get away with this. Any suggestions?

When the settlement was announced in July I had no luck tracking down how many cardholders might be eligible. (I just put queries into the FDIC and Advanta on this, and will update when I hear.) [See update below.] Advanta has about 1 million account holders, and it focused exclusively on small businesses.

The restitution sounds negligible for a lot of customers who are still paying 30%+ interest on outstanding balances. Per a reader Todd:

I also received my check today and am wondering whether it’s a good idea to cash it or wait to see if there is further action I can take. I was given an introductory offer of 0.00% and then 7.99% thereafter. However, it was increased to my present rate of 24.99% for no apparent reason. It would have increased to 34.99% if I hadn’t opted out and cancelled the account. Unfortunately, I still have a rather large balance. I called to request a rate decrease and was sent to an apparent call center in India. I was told the computers were down and I would receive a call back which never happened. Is there a class action suit or any other legal means to recoup the outrageous interest rates or at least decrease them?

I haven’t found any firm information about a class action, although months ago it sounded like someone was exploring the idea. If anyone knows more about this and wants to share the info, either in comments or privately, please go ahead. And if you got a restitution offer, let us know how much and what you plan to do.

The settlement is just a piece of Advanta’s troubles. The company cut off all new lending this spring, and it’s in danger of being de-listed from the NASDAQ because its shares are trading in penny-stock territory.

I’ll update when I hear more. In the meantime, please keep the comments on this one coming.

Update, Sept. 29

Advanta spokeswoman Amy Holderer declined to say how many customers are eligible for restitution, or the average amount of the payments.

The total amount available for restitution for repricing was reported at $21 million, with another $14 million set aside for restitution relating to a cash back rewards program. Just to put those numbers in context: Advanta lost $330 million in Q2.

The FDIC’s cease and desist order related to the marketing of rewards programs and rate increases. The regulator says Advanta violated rules against unfair and deceptive practices, as well as notification requirements. The order doesn’t require Advanta to lower the rates that the FDIC alleges were unfairly increased. The bank only has to pay customers restitution equal to two months of the difference between the promised APR and the higher rate.

In Advanta’s filing on the matter from July, the company notes that “the Bank did not admit any wrongdoing in entering into the agreements and entered into the agreements in the interest of expediency and to avoid litigation and the costs associated therewith.”

Update, Oct. 2:

I wanted to post links to two follow-up posts here, since this seems to be the main discussion thread.

Advanta Lawsuit Pending; Average Settlement $131

Advanta Customers’ Next Option: Small Claims Court

Also, I’ve heard from the attorneys involved in the California suit that is seeking class action status. There’s no Web site for the case since it hasn’t been certified as a class action yet, but Advanta customers interested can contact the lawyers directly. Their emails and phone numbers on the the first page of this complaint.

Reader Comments

Alena

September 28, 2009 8:54 PM

I had similar situation, I opened my small business account with Advanta at 0% interest for 12 month, and then paid 7.99%. It was the lowest interest rate card and because of that I used Advanta card frequently. In the middle of doing business with Advanta I received inserted pamphlet, which I didn't read closely, however next month my interest rate jumped to 24.99%. I was never late; I always paid higher payment then what my minimum payment was. My balance at that time was around $10,000 so my finance charge was originally around $70, but after the interest rate changed my finance charges jumped to some $250/mo. I thought it was a human error, so I called Advanta for an adjustment, but they said they couldn't help me, because their company is hurting and they have to pass the charges on their clients. At that point I was hurting too and I stopped making payment. They harassed me for about 30 days 2-3x a day. I explained, that I can't pay their interest rate and we negotiated the rate down to 16.99% I reinstated my payments, despite they closed my account and I started to pay steadily on time, however with rate like that I will be in debt for years to come. Today I received a check signed by John F. Moore for $313 valid for 180 days and if I cash it I will waive any future claims against Advanta. I'm going to consult my lawyer tomorrow.

Elaine

September 28, 2009 9:25 PM

I received a check today from Advanta in the amount of $422.01--I have been enrolled in Advanta's payment plan where I pay 9.9% interest for five years--prior to this my rates had been raised as high as 37%. I really need the money since my business is not doing well and I have a lot of other debt. I thought I'd check here to see what others are doing and if I should hold off on cashing it. It's good for 180 days.

grandmaKoufax

September 28, 2009 10:44 PM

I have an advanta acct that I stopped paying about 4 months ago, they have offered to lower my rate to 9.99% and even around 4%, thing is to get this you have to stop paying, if you need credit this wouldn't be the way to go... however just wanted to let you know your options...

A.J

September 28, 2009 11:28 PM

I too was put in the same situation with Advanta Bank and that started the ball rolling on other cards like Barclay Bank and American Express, Even though we have perfect credit...I was able to pay off the card , but do not want to cash the $93.94 cent check . I want them to feel the discomfort they caused me by giving me the squeeze..I think we should not settle so easy...

Jerry Tubbs

September 29, 2009 8:21 AM

I also received a check from Avanta for the amount of $181.10. Like all that posted, I am still being charged an excessive percentage rate of 25.99. I, again like most, was never late and paid ahead on my account. When I called to try and talk to someone in the help center in the U.S. I was told by the call center that I would receive a call back with in a couple of days. That has been weeks now. I also sent a letter the Advanta demanding some one contact me to discuss this problem and have yet to hear back from them. We all need to stand together and let Advanta know that we will not settle for pennies on the dollar and we want our original interest rate restored or they will face a Class Action. My business is hurting so bad that I may not have any other choice that to no longer make payments to Advanta so I can hope to have my interest rate reduced.

George Newburgh,NY

September 29, 2009 9:04 AM

I just received a check from Advanta for $233.76. I'd like to put this check somewhere, but I'll be civil. I had an Advanta Acct. at 7.99% which I paid on-line before I even received my bill in the mail. I even paid more than than the requested payment. Then, you guessed, 24.9% for what reason I will never know.I paid my account in full, because no matter what the reson was, 24.9% is outragous to say the least. I never want to see a business go under, but with Advanta, I'll make an exception.

Spring

September 29, 2009 10:12 AM

Same story here... received a check for 109, will not be cashing it. I've always been current on cards and expected Obama's CC bill to help... (a joke, now they have to wait 45 days to raise the rate!!) Anyhow, I took a step back and realized that I am paying 2k+ per month for a number. On reflection I've decided I'd rather have the 2k. I will not be making any further payments on any card above 12%. If the lower ones raise their rates they will fall into this category as well.

If they want to settle for a lower interest rate AFTER I've quit paying I will not resume... credit already damaged!

Chris

September 29, 2009 10:28 AM

Same story guys. I had even paid my account in full twice.

Now what should we do about this?

I think we all deserve to be compensated for the difference in the high % rates through today and have the current rate reduced to our old 7.99% rates.

Now are we all gonna sit on our hands? We could organize... flood their phone lines and web site and appeal to the FDIC. That's just a start. I don't think we all want to hurt our credit scores... but there are all kinds of OPTIONS. Remember, we are at least 1 MILLION STRONG!

Sally

September 29, 2009 10:49 AM

Same bait and switch routine. Offers on promotional rates, then jacked up the rate at the end to 36.99%. Then they lowered my credit line. I complained, was told basically too bad. Hubby wants to cash the check of $124.42, I say wait for the class action suit. They were complete and utter jerks, arrogant and need to suffer!

Squeezebox

September 29, 2009 11:03 AM

If the stock is being de-listed, I'd say take the pittance and run! Their accounts will probably be sold in bankruptcy court and the buyer will probably be allowed to charge any interest rate they want on the unpaid balances.

Karen

September 29, 2009 11:45 AM

Received check and thought this is a joke. That not even one months interest.
Thought let me search Advanta repricing and wow! Thanks everyone. Was unsure to cash check. Now I now I won't. Small business suffers. Large business get bailed out. Business has declined with economy and then we have to pay higher rates than offered when we opened the business. Unfair to small business.

Mel

September 29, 2009 11:45 AM

I had a 0% rate, but that changed after not making a purchase for a couple of years, That was to long for them, and when I did make a purchase for one thousand dollars they charged me 27%. I was one day late in making a payment. and they charged me a late fee plus over two hundred dollars interest for one month on a balance of $4200.00. It is ludicrous I had no choice to rid them by paying the balance, and today I received a check for forty dollars , big deal.

Mike

September 29, 2009 12:35 PM

So if I'm reading this right, I should stop paying until they offer to lower my rate?

Jennifer

September 29, 2009 12:39 PM

We had a corporate Advanata account for over 10 years always paying the balance in full each month, so the interest rate was not our issue. The issue we had was when we were given NO notice that our account was closed leaving us with approximately 2 dozen employees that had non-working corporate cards. Try to explain that to employees in the state the economy is in, we had alot of worries that we had to try and explain because of Advantas bad business.

Bob

September 29, 2009 12:43 PM

Advanta raised my rate to 34.99% rven I have never been late on any payment for the last 20 years. My contract calls for arbitration and I made a request to Advanta and they didn,t even respond. I just wrote then and stated I would not make any further payments until and unless they complied with our contract.

Ken

September 29, 2009 1:11 PM

Advanta raised my rate to 34.99% when we were current on all cards. This put us over the edge and forced us to stop paying as well. They have offered a five year plan but the contract clearly states that it is binding even to my Heirs! I will not bind my children for a company debt. Just how dumb do they think we are?

Wendy

September 29, 2009 1:34 PM

Beware about stopping your payments to Advanta. Due to the economy our business has really suffered so we hired a debt settlement attorney. Advanta would not discuss negotiations. They hired an attorney in Utah and filed suit in Utah. I have not ever been to Utah, but Advanta has in their contract they do not have to adhere to the Fair Credit Act and have jurisdiction to file in Utah. I filed appropriate court papers, but could not go to Utah. The Utah court granted Advanta a judgement against me. I am tired of these credit card companies and their attorney's. You try to do the right thing and they still do not care.

John St.George

September 29, 2009 2:44 PM

Advanta closed my card account, even though I was making regular payments.
I have a big balance. I want to settle for say 50%. They won't go for it. I wonder if there is some leverage here with the threat of a class action suit?
John

Carole

September 29, 2009 2:58 PM

When our interest rate was increased from 9.99% to 39.99% I disputed it with Advanta with no recourse. I wrote FDIC, Chambers, rip off report companies,etc. FDIC replied 2 months later that they will investigate. Another month later I received a rather vague letter from FDIC stating they found no discrepancies. Not 2 weeks later I read in headline news of the settlement. My intentions are to continute my dispute - NOW my complaint will include FDIC! They clearly knew about the problem when they wrote me with their vague response of no problem found. My interest went from $50/ mo to $600/mo. I am making payments but will be paying with no end in sight. We need another CLASS ACTION against ADVANTA and this time FDIC needs to work FOR the people like it is INTENDED! ONE MILLIION (of us) need to APPEAL TO THE FDIC!!

Sandy

September 29, 2009 3:02 PM

Count me on your list too. I have two businesses that utilized Advanta for our purchases, beginning with that terrific rate of 7.99%. Now, both are approx 30%. I also have vendors that had Advanta, and the same thing happened. We are quickly trying to pay off, but $250 interest each month is kicking us in the butt. I transferred some of the balance to other cards, but am still stuck paying the remaining balances.
So why did the FDIC feel this was a fair settlement? Nothing has changed except we got a $100 check and still have to pay their unfair interest rates.
Thanks FDIC - you really looked out for the little guys.

Tim

September 29, 2009 4:30 PM

Reading through everyone's comments just brings back bad memories. I too had a 0% intro rate then a fixed 7.99%. When they jumped me up to 24.99% I called only to be told they raised my rate basically because they could... "read the fine print" they told me. I had been paying $500 or $1000 over the minimum each month and NEVER was late. They even tried to sneak me into a late payment by not mailing out the statement but I paid on-line just in time. True Trash! I will hold onto my check for $189.43 and will join whatever class action suit that comes out of this. Maybe together we can show them the same pain we are feeling!

TERRI

September 29, 2009 4:34 PM

I won't even waste everyones time explaining my situation. It is a combination of all of the complaints. Just to prove it my check is for $676!!! I would like to cash it since it would at least be one payment but I would much rather reduce the 35% rate. I will never get this paid and have no transfer room since the credit limits were lowered on other cards. As a small business we have been hit hard by the economy and cannot find any assistance for the little guy. Where is our bailout? I am in for any action.

John Greves

September 29, 2009 4:39 PM

We just received one for $195.94- Checked the FDIC Rulings; Here's the PDF's-
http://search.fdic.gov/search?q=advanta+reprice+event&sort=date%3AD%3AL%3Ad1&output=xml_no_dtd&ie=iso-8859-1&oe=iso-8859-1&client=wwwGOV&proxystylesheet=wwwGOV&site=default

Also checked bankrate.com - Advanta Bank Corp. of Utah is currently rated at three stars (Performing) which is middle of the road.

Stocks as of this note are $0.63 Per share... Not too good.

What does this mean to me?
1: They cut a fast deal with the FDIC to prevent a Class Action Suit (CAS)
2: If a CAS were initiated it would probably be lengthy and force them into a corner of bankruptcy and default...

We had $700.00 into Washington Mutual when they dropped a bomb on us last year, and so the times they are-a-changing (To quote a phrase)

Here's my plan- Sit on the check for a few months and see what gels next- Cash fast if more clouds appear.

As far as these unprecedented increases and limitations on lending to small business are concerned -
I made a certain deal with the card companies at the start, and now they're changing the deal...
Sort of like me calling my auto company and changing the agreed upon price, interest and payment on my car loan - I'd just get laughed at and reminded that we had a binding agreement.

And yet the card companies are deciding to do just this.
All they are going to suceed in accomplishing here is to push national bankruptcy to meltdown levels...

Elve

September 29, 2009 6:13 PM

I'm holding on to this check... this was outright thievery on Advanta's part and someone thinks this minute amount will pacify the masses. Not so. This was unfair and this bank refused to work with us. Interest rate crept up from 7.99% to 16.99% for no reason; we thought that was unfair, so paid down our outstanding balance by 50% and then Advanta raised the interest rate to 34.99% again for no justifiable reason... other than to penalize us for lowering our balance due. I will never release Advanta Bank Corp. from "claims and /or actions that might exist" because this bank outright stole money each month from us with unfair interest rates at the tune of $260.00 monthly.

Ted taken ADVANTAge of Customer

September 29, 2009 6:14 PM

Thank you John Greeves for the link. I was thinking of cashing my check because I don't want to throw away good money but it looks like even though the check will be voided, they will have to keep the funds in a separate account which I assume we could request at a later date. They must keep this acccount (if memory serves) for another 540 days.

Advanta has taken advantage of us consumers and they need to make up for it. I can't believe that in just this posting how many have had interest rates reduced by stopping payments. I keep on paying my ridiculous rate because they said there is nothing that can be done, what a load of crap!

Thanks to all who are posting comments.

Charles from Louisiana

September 29, 2009 6:43 PM

Our small business had a credit line of $15,000. with Advanta which we would bring current (0) about every 6 months. In May of last year our interest rate went from 7.99% to 35.99% without warning. I called to complain and was told they mailed out a letter to let us know. I disputed their actions and made a payment. 2 days later I tried paying off the balance and couldn't and was also charged $39.00 late fee because the payment couldn't go through. I ended up paying off the balance a couple of days later and closed the account. I received a partial check yesterday with the difference in interest for the 2 months but no late fee and no cash back bonus that I forfeited by closing my account before redeeming. I will also hold my check for a few months and not release Advanta from future liability.

One more Advanta Victim

September 29, 2009 7:50 PM

I was really happy to read this article, its good to know I am not alone.

It really is quite devious to send small settlement checks to hurting business, this will make a much smaller class action base they have to deal with.

I would like to get that 5 year plan, but I don't want to loose my 700+ credit rating. Although I guess you could challenge it off when the company goes under, because by law if they don't respond to a challenge then the credit bureaus have to remove it.

Tony

September 29, 2009 10:54 PM

Advanta did a great job of ripping off all 1million of us small business owners. My check is for 215.86 I too plan to hold it and see what happens like John Greves. grandmaKoufax had a good ideal as well as a few others here maybe if we all stopped paying Advanta would have to lowwer all interest rates to get payment. It couldn't hurt it looks like all of our accounts have been closed out anyway.

Debbie

September 29, 2009 11:05 PM

Our story is like so many of yours. My husband opened his business account with Advanta with a 7.99% rate. We paid on time and even more than the minimum payment. In fact, all of our bills were paid on time. Then last September the rate was raised to 24.99% and the next month it was raised to 27.99%. I contacted Advanta to ask why this happened and they could not give me a reason except we didn't meet their criteria. They couldn't tell me what criteria we didn't meet but the next month the interest rate was dropped down to 24.99% BIG DEAL. I have written many letters to Advanta and they always send me a letter saying they tried to contact me by phone but were unable to get me. I have an answering machine so I know they did not call me. We too received a letter today for $200.25. I will not cash this because I want Advanta to have to come up with more than that to all of the people they have cheated. I don't know how much longer we can pay this high interest rate. Like so many others, business is not great right now and just trying to pay everything on time is getting more difficult. We are definately in on a class action suit if there is one.

Ron

September 30, 2009 12:17 AM

Let's all cash checks and stop paying them. What could they do then?

Wayne

September 30, 2009 7:19 AM

Same ole story here too, I signed up and agreed to a intro rate of 0% which soon turned into a rate of 7.99% and now is currently at 19.99% which I paid on time and always way over the minimums, and never late, then all of a sudden Advanta changes the game and the rules. I too got a check for $104.25 and intend on holding it, As many others have done, I called and was told "sorry" there is nothing we can do for you" I sent emails and did get replies with the same old song and dance. If Advanta will just honor the original contracts at sign up then I think many will be happy to continue to pay off their balances, My account also was closed by Advanta. However by raising the rates and fees, many will be forced to not pay and or wait on a future settlement class action. 1 million voices can be heard coast to coast. Where can we sign the long list of accounts holders doing this?

dean

September 30, 2009 10:10 AM

dean will also wait to cash check

TeresaE

September 30, 2009 12:47 PM

Same story, low intro, great card and then *bam*!

We were lucky enough to transfer the balance.

Check is for $111.

Here is something you all better consider, in class action lawsuits the only winners are the LAWYERS.

I'm cashing the check because 100% of something is better than the bulk of class action settlements that trickle into the hands of the "winners." Citibank paid out a whopping 10 CENTS to injured customers and the attorneys pocketed millions and millions.

Lynne

September 30, 2009 1:03 PM

I too have the same story. I will tell you I stopped paying 2 months ago. I figured what can they do since it was under our corporation. Well they did something. Advanta has never showed up on my personal credit, until yesterday. They somehow got it to show up on my personal credit report and marked me 30 days late which dropped my score from 780 to 715. Does anyone know will it keep dropping each month? I don't care at this point I will file a dispute on the report. I think we should all stand together and not cash these stupid checks. What they did to us is wrong and we will prevail. I am going to ride it out with the rest of you. Please Everyone, keep posting updates.

MikeD

September 30, 2009 1:22 PM

I'm sure they and much of their funds are protected by some corporate structure. We need to find out who Advanta's "parent" is because when this all blows over they will write off Advanta and will take their ill gotten gains to open under a different name.
It may have already happened. Any "new" credit card companies out there?

Debbie

September 30, 2009 1:34 PM

I am sitting here in shock. I can't believe I never thought about not making my payments. I will not cash my check and am on board to make them hurt as much as they have hurt my business.

MikeD

September 30, 2009 2:01 PM

A couple of thoughts,

I don't believe that the terms Advanta has attached to cashing the checks are legally binding. We can't send Advanta a partial payment doing the same thing;

Also, I live in Utah where they have offices and Utah Courts will not enter a default judgment awarding interest greater than 10% unless the creditor supplies the Court with written documentation showing the agreed upon interest rate. Wendy posted yesterday that she had a judgment out of Utah against her. Wendy, will you let us know what the court ordered interest rate was?

I have again requested an interest rate reduction based on the reported rate (9.99%) they are giving to those that have defaulted.

earl blankenship

September 30, 2009 2:53 PM

I have an account with Advanta that they raised to 34.9%. I tried to talk to these people, but I have never talked to such a rude arrogant bunch of thugs in my life. And I am A Used Car Dealer!!!!!!!!!!! I hope there is a special place in Hell for these crooks.

Qin Liu

September 30, 2009 4:20 PM

I had the same problem and they refused to lower my interest rate, despite the fact that I have neve been late to make one single payment. It seems that some people are receving a check? I have not seen any. I would be very interested in enter a class suit against them. I am in Colorado.

Bob

September 30, 2009 5:19 PM

Advanta is not the only one who hiked rates without cause. Capital One and Bank of America also have tried to soak 'good customers' for 15% rate increases, up to 25%.

It's good to recall though that debtors are not truly customers. They (we) are indentured servant to the creditors. If we were customers, we wouldn't have the problem of trying to take our business elsewhere, and not being able to do so.

San Diego

September 30, 2009 5:50 PM

same happened to me. Rec'd card with low rate then..pooofff the rate went up and they would not reduce. I called and called and called and they would not reduce. I rec'd $304. Don't know what to do with the check. I'd like Avanta to pay for my misery.

John Tozzi (BusinessWeek reporter)

October 1, 2009 12:17 AM

Hi everyone, thanks for your comments. I have a follow-up post on this as well here: http://www.businessweek.com/smallbiz/running_small_business/archives/2009/09/thanks_to_every.html It's got some info about one suit against Advanta that is seeking class action status. Please keep the comments and emails coming -- your help with this kind of reporting is crucial.

Koshy Chacko

October 1, 2009 6:02 AM

Thanks to all of you for your comments. I am a small business suffering just like you. My interest rate is 34.99%, $643.32 per month on a balance of $22,366.24. I received the refund check for $426.17. It is insult to injury. I will not cash it. What can we do together to get the interest rate reduced?

william coleman

October 1, 2009 3:26 PM

Same thing happen to me 0% balance transfer then the intrest rate is 34.99%I finally paid what i transferd plus some intrest and they still say I owe over 4600.00 dollars these people are nothing but crooks and should be run out buisness. i will not pay another dime. some body got any better idea.

Stephie

October 1, 2009 3:29 PM

I wrote a letter to Advanta addressed to John Moore, whose name I got from the BBB website. I sent it certified disputing the raise of my interest rate to 24.99% without my knowledge. I received a letter back from a Leslie Elsmore about 2 weeks later. This is the response I got:

We can confirm that your interest rate has been correctly established based on our lending criteria and in accordance with the terms and conditions of the account. We hope this letter will satisfactorily address your concerns about the changes to your account.

Like most issuers of revolving credit, and in accordance with the terms and conditions of the Advanta Business Card Agreement, we periodically evaluate our customers' accounts to assess their ongoing creditworthiness and overall lending risk based on internal and external factors that include information about your Advanta account, such as credit line utilization and payment history, and credit scores and information we obtain from credit bureaus about personal and business credit. We can also satisfactorily confirm that a notification and the opportunity to opt out was mailed to the address on file prior to any change in terms.

Nonetheless, in a good faith effort to resolve your concerns, we have reduced your interest rate to LIBOR + 14.59% for purchases and cash transactions, currently 16.99% This is the lowest rate we can offer for your account.

Please refer to section 12 of your Advanta Business Card Agreement for information on Amendment/Change in Terms. (end)

I have 724 credit score and have never defaulted on any loan. I also never received any notifications until they were going to raise it again from 24.99% to 34.99%. I have received a check for $149.00. I don't know what else to do.

lyndse

October 1, 2009 3:34 PM

i have been calling advanta for the past 6 week straight to find out information about the fdic settlement. usually they hang up on me! i am eligable for a cheque and when i get one, will be contacting my attorney on the matter. the fdic reports that they must pay back the interest and the "rewards" we were never able to earn. my interest jump from 7.9% to 29% and then to 36% happened last year. as far as i'm concerned, they owe me a lot more than a few hundred dollars.

onofrio bruno

October 1, 2009 3:42 PM

my story is the same as everybody`s else .
I also have received a check for $161.65
I will wait and see if someone comes up with a reasonable resolution. I`m paying now 29.9% for over 2 years and brought the balance down to about $8ooo. from the original $25000. I am a business owner strugling to pay my bills. Avanta seniors management deserve jail time for robbery.

a Reader

October 1, 2009 8:15 PM

My check is for $197 or so.

I also noted that if I cash this check, I'll be waiving Advanta's liability. I despise Advanta with every fiber of my being, and I have also thought about not sending them another dime.

Although I believe (and rightly so) that we were all taken advantage of by Advanta, I realize that I basically made a deal with the devil, even though I didn't know it at the time.

I'll cash the check, because a bird in the hand is worth 2 in the bush, but I will turn it right around and put it toward my high interest Advanta balance.

I know that even though they were crooked, I am liable for my debts. Period. Yes, it sucks.

I am working to pay off all my credit ANY of them.

Carleena

October 1, 2009 10:43 PM

Add CHASE to the list of other banks that have pulled this same stuff. They did it to me on my Disney Visa Card. Without provocation. Same story.

Sheila F,

October 1, 2009 11:18 PM

My husband's story is the same as all of yours - only he is now in chapter 7. He just received a check for $300.65 -
MY QUESTION TO ALL OF YOU is - Look at the check - is it made out to your business or to you personally? And if you cash it or deposit it into your business account are you accepting their check personally when the credit card is a "Business Credit Card" to your attention or in your name as
acceptable party to use it?

Frank Reed

October 2, 2009 11:03 AM

Same deal. I have decided to stop paying for now since EVERY other card I deal with has given me favorable terms over a 5 year period to take care of a small business debt that incurred while trying to provide jobs. Unfortunately, Washington is only colluding with big business to make the masses believe they are helping the economy. The trouble is that they simply filled the coffers of these banks who have then turned the screws on small business.

And President Obama wonders why his approval ratings have plummeted? It's because there is NO help for the little guy. Instead it's all falling on our shoulders.

Eric

October 2, 2009 1:59 PM

Same story as everyone..12% to 24.99%
with no understandable justification.
My call was a "Sorry, nothing we can do". Our check received is $788.85 the
highest I've seen thus far. It appears
they are baiting us to cash the check quick and so they can avoid future class action suits. I'll wait, patience
may pay-off and some of the major interest they ripped from us, may come
back. If you cash that check your allowing Advanta off the hook.
have collected might com

Lynne

October 2, 2009 3:15 PM

I stopped paying my card 2 months ago. Its now on my personal credit report after having this "business" card for 5yrs not on my personal credit report. Received an email from Josh Piersol today from Advanta offering me the (BUDGET PROGRAM 9.99% for five years) the letter states they will require a signed commitment letter from me. has anyone else done this yet and what was the outcome?

TM

October 2, 2009 3:52 PM

We feel your pain. We had our interest raised to 25.99% w/o warning. We were never late and paid extra. We struggle month to month to get everyone paid and could use the check, but it doesn't seem right to let them off the hook so easily. They need to feel the pain and treat people with respect.

C Boy

October 2, 2009 3:53 PM

Received a check for $300.00. Same story -- 8.9% to 39.9%.

K Nick

October 5, 2009 11:09 AM

Another sad tale here. Received a check as well. It really upset me. Was a paltry pittance of $289.00. After reading the letter, I couldn't believe they would do this and then state that I would release them from harm. The gall! We've kept our credit good during the downturn - never late and always pay more than the amount due - but that's difficult to maintain with an interest rate @ 25%. I am not cashing the check yet. Will wait to see if anything else comes out in the wash. A class action settlement may not be the best thing, as we most likely would see only a dismally small settlement - probably less than the check we received. I would much rather see the interest lowered substantially, with a check for the difference in interest for the full period of the increased rate. I would never have opened this account had I thought in a million years this could happen. I would love to pay this account in full, but that's not an option for us right now. I think I will try what Stephie did and write a certified letter to Advanta. A rate reduction to 16.99% is much better than 24.99%, albeit still a terrible rate for someone with good credit. I guess the lesson is to not use credit cards and only spend what we can afford, which unfortunately means a smaller company for us. One good thing about the economy is that it's forcing us to work smarter, reduce superfluous spending, and practice excellent customer service. Of course, this is the way we should always operate. Good luck to all of us!

Ken

October 5, 2009 1:05 PM

Got my "brush off" check from Advanta today and yes my story is also the same as all of yours. I wrote void across mine and am thinking of hanging it on a our wall of shame. I have Time on my side I don't think Advanta does.

Mary Lee

October 5, 2009 1:42 PM

This just proves that reading the fine print on EVERYTHING that comes from a credit card company is so important, so is keeping your original contract.

5 years ago I got my Advanta card. 0%, in one year it went up to 16.99%. I know it was supposed to be 7.99%, but I they claimed that it was 16.99%, counting on the fact that I did not save my original contract, which I had not. (I always do now). Next I got a very tiny print notice stuck in my bill that said if I did not notify them to decline that my rate would go up to 34.99%. Of course I notified them and my account was closed. That dings the credit some, but not as much as trying to pay a 34.99% on a 9,000 balance would!

I have never missed a payment on any card and I always pay more than the minimum due, yet just about every card I have has pulled this fine print rate hike on me. Just about all my cards are closed now. While it is upsetting, it has proven to be a boon, as I am just about completely out of debt, since all I am doing is paying them off and learning to live within my means, instead of within my credit limit.

Peggy

October 5, 2009 3:43 PM

Wow...this is turning into a broken record. Same deal here. Opened the card with a super lower interest rate, always paid on time, then interest rate jacked up to 24.99 and now 34.99! That can't be legal. I had a large amount of unused credit with Advanta and now that they've cancelled all our accounts that really hurts your credit rating out of no fault of your own as that unused credit just disappears. I haven't received any check or letter yet but am watching the mail. This sounds like a class action suit if ever there were one. What can we do?

Bonnie

October 5, 2009 8:32 PM

I'm waiting to cash my $246 check. Will discuss with a lawyer friend about chances of class action suit against the greedy criminals!
Bonnie

Dave

October 5, 2009 8:37 PM

Wow! I thought I was the only one shafted by this lame excuse of a company. I too had the 0% intro rate which then went to 7.99% fixed. Always made on time payments and more than minimum only to find my rate jump to 22% and one month later to 37%. I emailed the company only to get the canned response reply that Stephie posted. I later called and the rep "Suzanne" who was clearly based in India, almost gave the verbatim response as the email. I am holding on to my $236.00 check and won't give these clowns the satisfaction of being "released" from liability. I'll hold out with the rest of you and join any CAS that comes about. If we passed along all of our hardships to our customers, we'd be out of business which as we can probably guess, is what will be the fate of Advanta. Good riddance!

Tom

October 5, 2009 8:53 PM

I was also taken by the nice folks at Advanta. Started out a 0% and went to the agreed upon rate of 7.99%. Next thing you know I'm sitting with a $20,000 balance and the rate is at 24.99%. I called to get the rate reduced due to the fact that I'd never been late and that rate is incredible. Well, the Indian gentleman wouldn't budge a bit so I cancelled my card that day. I despise Advanta with every part of my being, but I think I will probably cash the check as I don't see them staying in business much longer and I certainly don't see the sense in trying to gain class action status against a company that is virtually bankrupt. The worst part is that the people who ran this company into the ground will probably get jobs at other credit card companies when theirs is done imploding. Good luck to everyone who was damaged by these crooks!

Gary

October 5, 2009 8:54 PM

Guess I'll join the drum beat. I got my check today for 35+ dollars. My interest went from 9.99 to 34.99 and I couldn't do anything about it. Luckily, my balance was only $3000.00 but it still made me furious. I'm going to hold on to the check and see what happens. I hope this thread keeps going for a while.

ben

October 5, 2009 11:16 PM

I get my check too... $44.39... I will hold this check to send to the Advanta owners to clean they #?* when they go to jail... that's what they deserve after put down all the small business owners who try to keep they business every day with dignity.

Jennifer

October 6, 2009 2:45 AM

I was so upset I could spit. I quite my job in Denver after living there for 30 years and moved to Texasfor a couple of months to take care of my eldely mom.I paid off every thing I owed and keep the Advanta card because it had low interest. I had charged up my account to 10,000 three times and paid if off 3 times in the last year: My credit was excellent. I freeked out when my rate went from 7.99 to 30.99. My payment was 130 a month and I paid 500 and never late. They increased the interest rate and since I pay on line I never read the statement giving me notice of the increase. A rep told me it was because there was something on my cbr. My cbr is perfect. I called back and talked to a female rep she said to call back in two days and she would see if she could get my interest rate back to normal. I call back in a couple of days and ask for her and a loser male rep said I was not allowed to talk to her and all my calls were to be directed to him only. When I question him on why he would not let me talk to her he said I was harassing her? (that is just crazy) I ask him why is my interest rate so high he said it was because I was a business owner. I advise him I opened the account 5 years ago and I have never been a business owner. He said he would have to close my account. (that is insaine) It was Advanta's mistake to give me credit when I did not own a business. I applied and never stated on the application I owned a business. They raised my interest rates when I have never been late and always paid more that I owed each month. They closed my account(when it was the only credit card I had) I lost my password to pay my account on line and they wanted to charge me $15 to reset my password(are they nutbags?)Than they sent me a letter stating I choose to close my account.OGM!!! I felt like this is communissum. I called again and a rep told me to write a letter to Advanta and tell they why my account should not be closed and interst rates raised so I did. I received a run around letter back that was a joke. Now I am stuck in Texas during the recession with a extemly low pay job and no credit card move back home to Denver. I had anxiety attackes. I wrote a letter to the President of Advanta stating what the hell are you thinking?
(of course never received a letter back)! I want to file a class action. I felt violated, disrespected, mental distress,stranded and no logical reason for all this stress to be happening to me through no fault of my own. The Advanta reps were the rudest people I have had to deal with in my life. I traveled to Tyland and Alaska two months earlier can you imagine if they would of closed my account when I was out of country with no other credit cards on me. I paid them off a couple of months later but I am still not over it. Does any one have information or attorney's email address to file a class action??NO way am I cashing my check from Advanta.

codename57

October 6, 2009 8:47 AM

Not just Advanta-I have never been late with a payment to ANYONE!. I am a loan officer by trade. Middle score was 808 in April 2009. Then in June they took my rate from 7.9 to 30%. Give me a fricken break! I filed a case with the FDIC and received a b/s letter from Advanta saying I was late twice in the previous year. Even though I have proof I was never late. Then the FDIC sent me a letter saying Advanta responded to my complaint (but they seem to believe Advanta) My Attny then served Advanta who never opened the letter and mailed it back to him.

At this point I will never send Advanta another payment and will take them to court after they die a slow miserable debt. People-don't send them one single penny. I am all about good credit but I am not rewarding crooked business practices.

Just think.... the CEO still pays himself $1m salary. For doing what???

Lynne

October 6, 2009 1:38 PM

I asked you guys if anyone heard of this Josh Piersol person from Advanta offering the budget plan. I talked to him today. He was so pleasant and wonderful to talk to. (spoke english too) he gave me the budget plan 412.00 month for 5yrs. 9.9% interest to pay off my 19000.00 balance. I know this will take forever but at least "he said" it will stop my personal credit from going to "0" after dropping 100 points in 3 days. If you think they won't attack your personal credit think again. It happend to me and I have worked very hard at keeping it 780. This plan will "hopefully" get me on the track to credit recovery. Hope you guys talk to him too. if he calls you, just talk to him and see what he can do for you.

Shelby

October 6, 2009 2:44 PM

I received a check today which they refer to as a "reimbursement related to a reprice rate". In laymans terms, Advanta is giving the money they got by increasing our rates from 7.9% to 28.99% - also called "screwing over the consumer rate". If you cash the check you are accepting a release to NEVER sue Advanta Bank Corp which includes any and all of their subsidiary credit card companies. Think before depositing or at least ask a lawyer about it. Good luck!

Tara

October 6, 2009 4:19 PM

My story is the same as everyone else. I did stop paying them and they called all my phone number 4-6 times a day. Today I received a check for 4.73. Are you kidding me? You raised my rate from 7.99 to 32.99 on 10,000 and that is what I get. I will not cash this check and I would rather get bad credit then pay them 350 a month in interest. If people are worried about their credit they shouldn't be because everyone knows Advanta has nothing but crooks lending the business. I would think we all deserved the difference between the rate we should have paid and the rate they hicked it to.

I want out of debt

October 8, 2009 12:27 PM

So from what I am reading I really have two options...

1. Cash the check and that's the end of it
2. Sit on the check and see if anything else happens?

What to do?!?!?

Bob

October 8, 2009 2:13 PM

If everyone who have been taken by Advanta sticks together, we have the advantage not Advanta. If no one makes a payment until and unless they fix the mess they have caused, they will have to either deal in good faith or the FDIC will close them down for lack of funds. Also, if they write the credit agencies, you have a right to protest their statements so make sure you do.

Hong

October 12, 2009 1:47 PM

My current APR is 11.99% with a balalce of $10K, I transferred it to Capital One for $6.99 w/o fee. Looks like I got the best rate from Advanta ?

Aka Sam

October 12, 2009 5:43 PM

Advanta's crushing interest payments are driving our small business into looking at bankruptcy. They changed the rules in the middle of the game. Not the agreement we signed up for many years ago and have NEVER had a late payment or been overlimit. We've been protecting our stellar credit rating by making outrageous interest payments with very little going toward principle. We will go under if we keep up to date on the Advanta card payments.

Bp

October 12, 2009 7:33 PM

My account followed the course of most everyone else: 0% - 7.99% - 29.99% in a matter of 15 months, all without me ever missing a payment and many times paying off the balance. Upon complaint, I was told this is the way it was! My balance was pretty high at the time they raised the APR to almost 30%, so all focus was transferring and paying off. I didn't want to pay these people another dime. That was over a year ago. Today I received the $39.59 check. I really want to be part of a class action against this company, but like others, I believe the company is headed for the bottom of the sewer, never to see the light of day again. I can't afford an attorney to go against a failing company for who knows what money. Is there a "voice" of counsel for those of us who have already lost their business and have moved on? Right now, $40 will buy groceries.

RMAN

October 14, 2009 12:01 PM

Go Obama GO!
Wouldn't it have been more helpful to not allow CC companies to raise the interest rates on any balance prior to the new rate? The higher rate should only apply to charges made AFTER the change. Then we could at least stop using it and still pay lower interest on our AGREED charges.
Im in same boat $187.00 check but I only owe Advanta $150.00 on my $10000 balance, I was using my cards for fuel and ran $47000.00 a year in fuel and usually paid Advanta $5000.00 a month in payments.
I can get better rates from the mafia.
It was mentioned that a Class action suit will only cause the lawyers to get rich, well at this point I would be satisfied to get a 10 cent check and the lawyers get millions as long as Advanta doesn't get to keep it. I want them to feel as victimized as everyone else.
If you look really close, ALL of Obama's plans involve the small business' to sholder the cost! Not the government, they only want to control it. Doesn't anyone up on capital hill understand that if I have to pay these rates and penalties for insurance coverage then I will fire my employee's or pass the cost to them. Can you imagine paying $10.00 for a cheese burger at McDonald's because the cashier now has health insurance?

TOM OTM

October 19, 2009 10:54 PM

Well what about the Power of WE THE PEOPLE? I got the same story and it goes for other Banks Also, Only one Bank of Navada has let me OPT out and keep the original agreement though I had to close my account. Advanta was my only business account card I "Had" I now have none. What if WE THE PEOPLE just said piss off were only paying 3% on ALL of our debt. They get our taxes, our father's taxes and our fore father's taxes just being pissed away to keep the rich wealthy and the "MORE" poor paid for. We just have to keep out business LOCAL and Personal. No more Box Store Crap that sucked the money right out of the local economy. Anything we do to save the planet and end poverty is put to death during the imported purchases of cheap tainted products that don't even last a couple years. I still have my fathers TV that still works. I am guilty of buying a Big Screen imported TV. its all based on PROFIT and SOCIAL STATUS, god knows we would all have different friends if we got over a million bucks in TARP money or a bounus. I wont cash the check, as a matter of fact I would jsut assume shove it to them ALL OF THEM

David

October 21, 2009 8:11 AM

The reason that none of us are willing to tell Advanta to shove it is that we're worried about our credit scores. Why not send a million letters to the credit reporting agencies demanding that they ignore these crooks? I have a technology that I will offer for free, that will help with this. Any interest?

codename57

October 21, 2009 11:41 AM

Tom Otm for President!

David-I had perfect credit until Advanta tried to put the screws to me. Now my once 808 middle score is 590. SO WHAT? If the only negative reference is a crooked company, I can live with myself.

I refuse to pay them one cent. Eventually when they pizz off all of Attny's they haven't paid, I will take them to court for complete discharge of this debt and force the credit bureaus to correct my report to $0 and "paid as agreed".

Amazing how I haven't seen one word of this on any news network.

David

October 21, 2009 8:28 PM

codename57 - Is this correct? How can one force the credit bureaus to correct your report? Is there a precedent that you know of, for this? If so we should all band together and make it happen.

karen

October 23, 2009 4:49 PM

Just received another check for additional cash back rewards. How come with any other cash back rewards from other credit cards we don't have to sign a release in order to cash the check! Was this our reward for using the card? This is a slap in the face like the first reprice check.

Cornhusker

October 31, 2009 11:40 AM

Got my check for $43.58 today. I'll be cashing it.

I opened a small biz account with Advanta in 2003 at the 15-month 0% promo. I paid it off and the rate went to 7.99% and has never been increased. I have a balance of around $12K that I'm paying on each month at the 7.99% rate.

I've never had any issues with Advanta and will continue to pay down the balance on my account until it's at zero.

For those of you who are thinking about not paying on your accounts as a matter of principle, I'd advise against destroying your credit score. Eventually, the economy's going to turn back around and become strong again...and when you want to buy that next house or car, you'll be sorry you let your credit rating drop because of this one bank. Just pay them off and be done with it.

MJ

November 12, 2009 2:30 PM

Ditto, ditto, ditto. Charged an unbelievable interest rate of 34.9% after no late payments, ever. I was told there were "other factors" contributing to the rate hike but noone could tell me what they were. They have offered me a pay-off plan over 5 years at 9.99%, but I have never received a settlement check for re-pricing of my interest rate last year. Are checks still being distributed? There is no way I'm not elegible and won't let them tell me differently. CAS all the way...i'm in!

Ray

November 16, 2009 11:18 AM

Same story as all you Guys. Was sucked in with the 0% intro. Transferred balances from other small business credit cards i had thinking i was saving on interest. Was never late and paid double of min. pmt most months and this is my reward. A $62 check. They can stick it where the sun don't shine and i'm waiting it out. If i lose $62, big deal. If i wasn't afraid of losing my credit score i would stop paying like a lot of you guys. I'm paying almost $300 a month in just interest on a less than 10k debt. What absurdity!!

Don

November 25, 2009 12:06 PM

I also received a "settlement check" from Advanta. To date, I have not cashed the check and would be interested in hearing more information regarding any/all class action suit(s)against this company given the overall actions by Advanta and the disregard they showed to business owners like myself.

SeaLady

December 7, 2009 6:37 PM

I've gotten two checks from Advanta - one for a whopping $12.00 and the other for $64.00

When I signed on with them I had a 2.99% deal till the balance was paid off and 9.99% on new charges.

Well I wasn't happy when they charged the interest to the 9.99% area as they do not apply ANY of the payment to this part until the 2.99% is paid off.

But it still wasn't bad UNTIL they raised me to 30% and even though the balance was only 2400.00 on the current charge part the interest was about 58.00 a month and of course NOTHING got paid to this part until what I owed on the 2.99% for life was paid off.

SO I did a balance transfer that cost me over $700.00 not to mention the interest they had charge me for several months.

I also had NEVER been late and always paid way more than was due.

I too am sitting on the check and want to join a class action lawsuit.

Plus where I did the transfer to - the low rate was only for a year and that is about to expire in January - and then I am going to be stuck paying who knows what in interest.

And no offense who said yea Obama, unless you were being sarcastic - but nothing like giving the CC companies 9 months to jack up rates before they have to start behaving like humans...........these people need to be stopped.!!!

Ted taken ADVANTAge of Customer

December 8, 2009 5:41 PM

I just got off the phone with someone in INDIA and his supervisor and they tell me they are not offering reduced rates or set interest rates. Any advice on getting to the right person?

richard

December 14, 2009 3:54 PM

Lynne - I have read hundreds of blog entries re: Advanta - yours is the ONLY ONE which mentions a five year plan and reduced interest rate to 9.9% - I noticed you were very careful not to provide a phone number, e-mail or or link to this guy, - frankly I think you work for Advanta and are just trying to intimidate folks.

richard

December 14, 2009 4:18 PM

Codename57, in your experience how long will it take before Advanta makes a settlement offer? And why in the world do you have to miss payments in order to receive a settlement offer?

david

December 30, 2009 11:55 AM

Does any one know any action we can take against advanta? They are strangling my business

Tracy

January 5, 2010 1:10 PM

Is there someone I can talk to directly about the PROBLEMS I have had and still am having w/ Advanta? I too was a victim of the interest rate hike and still am having problems. Any help would be so appreciated!

Marie

January 7, 2010 8:36 PM

I too got the bait and switch from Advanta. However, I never received any sort of settlement check.

I did get a call a few months ago after stopping making my payments. They offered to settle for a portion of the current balance and I agreed and made a payment. Literally five minutes later I get a call back saying they changed their mind and "weren't authorized" to make that agreement and that I was responsible for the entire debt.

These people are truly the scum of the earth.

Michael K

February 4, 2010 2:01 PM

I see a lot of complaints against Advanta (yours truly too), but nothing is being done; are all senators and congressmen and Attoeny Generals too busy running for reelection?

B.B.

February 6, 2010 6:11 PM

Same here. This is now Feb, 2010. Any developments on what will happen next. The 180 days are almost up. Will there be further actions and what will this mean. If they have no money down the road then no will get anything. How can we organize to keep up the flow of what information there is on CAS or our staus as plaintiffs. Cashing the checks
ends any further claims by contract. What claims do we have as a plaintiff class. We can complain about what they are doing or have done, but we need a websight that lays out our rights and course of actions. Any one know how to start a class action website?

george

February 16, 2010 6:26 AM

I cashed my check, and also decided to stop paying at the 29.99% interest rate. I'm over 30 days and getting daily calls from their call center in India. I am refusing to pay until the interest rate is returned to the original 9.9%. Don't care what happens to my credit score. FDIC will be shutting them down soon, hopefully we can negotiate reasonable interest rates with whoever takes over the receivables.

Bill Snow

March 10, 2010 8:28 PM

It seems like everybody is sharing the same sick story. I too . We all know what they are trying to do. Advanta, by their own hands are distroying themselves. Do what I have done. Just as soon as you can, sign up with a debt settlement company. They will help pay off your debt in 36-48 months at a fraction of what you owe to Advanta.
You have an unsecured loan with Advanta.
Do not pay anymore of your hard earned money to those crooks. They will hound you and make empty threats. They will threaten you with law suits and lawyer fees, and many other empty threats. You see, it would cost them more to hire
lawyers than you owe them. They cannot take away any of your possessions, and they will not take you to court, even if they sat they will. I know because I did the same thing with Advanta once before, and they still gave me another
credit card. Do not give them your money!!!

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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