BARCLAYCARD AWARD RIPOFF

[Anonymous]

Welcome to myFICO! I enjoyed reading your well written and articulate letter and I hope the outcome is positive for you. Please keep us updated. See you around the forum.

[kdm31091]

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@Anonymous wrote:

1. Some folks have inferred that my case is trivial and urge me to move on.  Indeed I have not suffered a major financial loss in this case.  However I am not the only person who lost as a result of Barclay's action.  And Barclaycards is not the only culprit.  A friend of mine has accumulated some 400,000 points (over 20 years) on American Advantage worth some $20,000 that are soon to be devalued on a whim by American Airlines.  Collectively these companies are walking away from millions of dollars in promises.  They lured us in to purchase their service with promises of rewards that they now want to default upon.

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The thing is when you enter into a mileage program or any reward program (other than one that is straight cash), a "mile', or "point", does not have some defined, permanent value the same way a penny does. People need to stop thinking of points/miles as "money". Think of it like tickets for prizes at an arcade. The arcade can change the value of prizes at any time. This is similar. You are accruing miles or points, which the company can alter the worth of whenever they want. It sucks because the points were previously worth more value, but they were within their right to change it .

20 years is a long time and one can't expect a program to remain the same for that long. Looking back at 1996, for example, almost no credit card that exists today existed then. Things change with reward programs. Sometimes for the better and sometimes for the worse.

As far as winning or not winning the argument, I would think truly "winning" would be convincing Barclay to revert the points value for all cardholders which is almost certainly not going to happen. They may give you the compensation just to quiet you down, but that still won't solve the practice of arbitrary point values in the future. This is why you have to just take it for what it is IMO.

[Anonymous]

Hey hey!

So, my 930k points that I had saved up for years just lost a lot of value.. 

No chance of getting anything back on this?

[sr383]

I guess the idea is to think of it like stock ... that can only decline in value. 

[Anonymous]

Great Letter!

I also feel this falls - not necessarily in the realm of "points or miles" but in the realm of FAIR BUSINESS PRACTICES.

If I have 3 cards I can use and I use Card A because I will gain more points then Card B or Card C and all of a sudden Card A changes their point program without notification it becomes DECEPTIVE. After all that is why CC companies offer points - as INCENTIVE TO USE THIER CARD OVER ANOTHER COMPANIES CARD. It is a very competitive market and they should not use DECEPTION to gain business over other card companies.

They really should be held accountable.

[yfan]

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@Anonymous wrote:

So you think it is ok and proper business practice to unilaterally devalue your accounts payable - all you have to do is notify the payee that you decided to change the terms?

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If the entity the account is payable to explicitly agreed by applying for the account that such devaluations may be done at the whim of the business, then yes.

Truth is, this is not accounts payable, not in cash anyway. When you opt into a point currency rather than cash, you choose to assume the risk of devaluation. Cash devalues too (inflation), but usually not as much.

I am all for consumer protection laws, but rewards are an enticement, not a core consumer product in and of themselves. As such, rewards are reasonably (IMHO) far more a subject of buyer beware than the core loan product, made up of pincipal, interest, and fees.

[yfan]

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@Anonymous wrote:

Thank you to everybody for your comments, especially those that offer kudos or support.

I do have a few thoughts about some of the issues raised.

1. Legal requirements vs. fair and good business practice:  Some folks have pointed to the disclaimer printed on mileage program agreements.  Agreed , that states what a credit card company currently can do legally.  But I think that legal standards are minimum standards, most companies perform to satisfy customers, or to do what is fair or decent - not just what they can get away with.

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There is also a balance here. Regulating credit card rewards as a core part of the credit card loan product will much more easily just force the end of rewards than regulating interest rates would the end of the credit card product itself. Banks want to make money from interest and from swipe fees (hence the rewards to entice you to use their card), but I'd bet their margin on swipe-reward net is a lot less than their margin on interests and fees. Thus, there is far less room to regulate without shutting down rewards altogether.

In terms of fair and equitable business practice, good faith has to apply both ways. If a bank assumes, without making you sign explicitly, that you will use their card even for transactions with low or no rewards for their product, and you don't, are you in violation of fair and equitable practice? I don't think so. Similarly, when the bank doesn't explicitly tell you they will not devalue your points (in fact they explicitly say they may), I don't know that it can be termed unfair or inequitable.

[Bman70]

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@yfan wrote:

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@Anonymous wrote:

Thank you to everybody for your comments, especially those that offer kudos or support.

I do have a few thoughts about some of the issues raised.

1. Legal requirements vs. fair and good business practice:  Some folks have pointed to the disclaimer printed on mileage program agreements.  Agreed , that states what a credit card company currently can do legally.  But I think that legal standards are minimum standards, most companies perform to satisfy customers, or to do what is fair or decent - not just what they can get away with.

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There is also a balance here. Regulating credit card rewards as a core part of the credit card loan product will much more easily just force the end of rewards than regulating interest rates would the end of the credit card product itself. Banks want to make money from interest and from swipe fees (hence the rewards to entice you to use their card), but I'd bet their margin on swipe-reward net is a lot less than their margin on interests and fees. Thus, there is far less room to regulate without shutting down rewards altogether.

In terms of fair and equitable business practice, good faith has to apply both ways. If a bank assumes, without making you sign explicitly, that you will use their card even for transactions with low or no rewards for their product, and you don't, are you in violation of fair and equitable practice? I don't think so. Similarly, when the bank doesn't explicitly tell you they will not devalue your points (in fact they explicitly say they may), I don't know that it can be termed unfair or inequitable.

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This is why I have only cash back rewards cards, no points-based cards. Except IHG, but that's for the annual free night. So even if the points take a dump, the free night is still a free night at any property. 

[grillandwinemaster]

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@grillandwinemaster wrote:

Gerry, I'm also 100% behind you.  Even if your results are not fruitful, I firmly believe that as a consumer, one must let our voice be heard.  Surely, it's within Mr. Hess' ability to compensate a valuable customer.  The term "good-will" is often times used in this forum to ask for mercy on ones credit report in some fashion or another.  However, the true definition of "good-will" is the extension of some gesture to appease a long standing customer.  I truly do hope that you experience good-will from Barclays. Some larger institutions have forgotten how to treat customers.  Best wishes to you in your endeavors with Barclay. Please keep us posted as to your results.

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Hey Gerry, it's been almost two weeks since this incident. Just wondering if Mr Hess had the decency to reply with a response. Let us know, thanks.

[RonM21]

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@beautifulblaquepearl wrote:
Welcome to myFICO! I enjoyed reading your well written and articulate letter and I hope the outcome is positive for you. Please keep us updated. See you around the forum.

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+1