Is this Unfair and Deceptive Trade Practices? (GE Money)

[soliloquy]

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@seattletravels wrote:

Actually, at least for Care Credit, your minimum payment due is just 3% of whatever the balance is.  Its a revolving account so you can pay it off whenever you want.  If you specifically want to pay it off within the promotional period, its your duty to make sure you're paying the correct amount.  They're giving you 12,18,24 months no interest but your minimum payment is still 3% or $15 of whatever the revolving balance is.

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The promotional summary was for the account to be paid off before 12/31/2012 in EQUAL (NOT MINIMUM) PAYMENTS NO INTEREST. My minimum payment has NEVER been 3% of the balance. Right now my balance is $1,226.62 as I already stated above. But, my monthly payment right now is $94. 3% of $1250.00 is NOT $94.00. They are not calculating a minimum payment in the way Care Credit does. I think you misunderstand the terms of the agreement. 

[OhioCPA]

But $94 is close to 3% of the original balance. I would imagine in the fine print they stipulate that you would not be charged interest if you pay the equal payment amount, not the minimum payment that will be calculated as your autopay amount.

[Jstic]

I am a little confused. Are you interpreting the "equal payments, no interest" part of the promotion to mean that the equal payments that are made will eventually pay off the balance before the interest free period ends? If that is what you are asking, my thinking would be that no where in the promotion does it specifically say that if you make the equal payments you will pay off the balance before the interest free period ends and not have to pay the accumulated interest.. While the wording may be deceptive, you would have a hard time making a court believe that it was intentionally done by GE Money. And while you and I know better, that would be their argument.

The only way you can prove that they intentionally mislead you is to get a copy of the recording of the phone call you made where you state that the rep. stated the account would be paid off if you continued making the automatic payments. If there is no recording, it is your word against hers/theirs. If you got that, and combined it with similar complaints/cases from other customers, you would have the makings of a class action against them.

I would check the small print on the original application/agreement. GE Money may have a way out of this in that print.

[Lel]

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@soliloquy wrote:

I know you all aren't attorneys so I'm not asking for legal advice. I can get that from work. I guess this is more of an informative post to make people aware of this financing tactic.

I usually do not use store credit but sometimes it is tempting when they offer that 0% interest for 24 months, etc.

However, in reviewing my credit card statements for Rooms to Go (GE MONEY), I forsee a problem.

When I bought furniture there, I bought it under one of those 0% interest promotions.

I purchased furniture on 4/2010 in the amount of $3,019.

The promotion was "equal payments no interest" - in fact that is STILL what it says on the promotional summary when I log into my account.

Now, I had it on "autodraft" and I have never been late. My payments had been the same every month from April 2010 until April 10, 2011 when the adjusted my "equal payments no interest" payment downward about $25.00 per month. I called at that time and she said that the account was adjusted to reflect equal payments no interest through the duration of the promotional period and told me that the account would be paid off before the promotional period expires as they currently have it set up.

:/

Now, this promotional period ends 12/31 this year.

My balance is $1,226.62 and I pay $94/mo. The payment for this month has not yet been made.

So I have 11 payments essentially before this "deal" expires. That's $1,034 more worth of payments leaving me with a deficit of 192.62 as of 12/31/2012 when their promotion expires.

My understanding is that if you do not pay this account off in time, they charge you compounded interest from the date of the original transaction. I feel like they have set me up. If the payment had remained at the original amount before they "adjusted it in my favor" last year, it would have paid itself off on time.

Is this a tactic GE Money uses frequently?

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What were the exact terms of your purchase?  Based on the dates that you have listed, it wasn't 24 months at 0% interest - more like 32 months.

How much were you paying each month when you first opened the account?  Was it $94 + $25 = $119, or another amount?

How much total have you actually paid since the account was opened?

Is there any possibility that the balance listed on your account includes deferred interest for which you won't be liable as long as the principal is paid off by 12/31?

Sorry for all the questions.  I'm just trying to get a better grasp on your situation.

[Anonymous]

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@Lel wrote:

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@soliloquy wrote:

I know you all aren't attorneys so I'm not asking for legal advice. I can get that from work. I guess this is more of an informative post to make people aware of this financing tactic.

I usually do not use store credit but sometimes it is tempting when they offer that 0% interest for 24 months, etc.

However, in reviewing my credit card statements for Rooms to Go (GE MONEY), I forsee a problem.

When I bought furniture there, I bought it under one of those 0% interest promotions.

I purchased furniture on 4/2010 in the amount of $3,019.

The promotion was "equal payments no interest" - in fact that is STILL what it says on the promotional summary when I log into my account.

Now, I had it on "autodraft" and I have never been late. My payments had been the same every month from April 2010 until April 10, 2011 when the adjusted my "equal payments no interest" payment downward about $25.00 per month. I called at that time and she said that the account was adjusted to reflect equal payments no interest through the duration of the promotional period and told me that the account would be paid off before the promotional period expires as they currently have it set up.

:/

Now, this promotional period ends 12/31 this year.

My balance is $1,226.62 and I pay $94/mo. The payment for this month has not yet been made.

So I have 11 payments essentially before this "deal" expires. That's $1,034 more worth of payments leaving me with a deficit of 192.62 as of 12/31/2012 when their promotion expires.

My understanding is that if you do not pay this account off in time, they charge you compounded interest from the date of the original transaction. I feel like they have set me up. If the payment had remained at the original amount before they "adjusted it in my favor" last year, it would have paid itself off on time.

Is this a tactic GE Money uses frequently?

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What were the exact terms of your purchase?  Based on the dates that you have listed, it wasn't 24 months at 0% interest - more like 32 months.

How much were you paying each month when you first opened the account?  Was it $94 + $25 = $119, or another amount?

How much total have you actually paid since the account was opened?

Is there any possibility that the balance listed on your account includes deferred interest for which you won't be liable as long as the principal is paid off by 12/31?

Sorry for all the questions.  I'm just trying to get a better grasp on your situation.

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+1. I think putting down all the figures will help you getting a better answer

[Jstic]

It does sound like the terms were for 32 months, from 4/2010 to 12/2012. If you multiply $94 x 32, you get $3008, which is very close to the original loan amount($3019). The question then becomes what is GE Money's motivation in lowering the payments as the balance declined? Did they do this purposely to cause you to possibly not pay off the balance before the accumulated interest date kicked in? Or is this just standard procedure and buried in the small print in the terms of the financing. Something tells me that they have their backside covered here.

[Lel]

Bumping this up....I'm still curious about what happened here.  As I re-read the original post, it sounds like GEMB could have been setting soliloquy up for failure to pay off the balance during the 0% period, by reducing the payment amount.  But it's hard to know for certain without more information.

[FrugalRican]

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@Lel wrote:

Bumping this up....I'm still curious about what happened here.  As I re-read the original post, it sounds like GEMB could have been setting soliloquy up for failure to pay off the balance during the 0% period, by reducing the payment amount.  But it's hard to know for certain without more information.

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This is exactly how I read the original post.

I'm curious as well.

[soliloquy]

I'm not sure what happened. All I know is that the account was to be paid off (no interest equal payments) so that the account would be paid in full at the end of the promotional period. That's what the promotional material says...and that's what I was told. However, since i'm sick of thinking about it, I just paid it off so now it's not an issue. I know what to look for if there's a next time...

[jdogi]

As was already pointed out, the terms likely state that there will be no deferred interest IF you pay before the end of the promotional term.  It probably does NOT guarantee that your minimum due on each statement will get you there.  Did the CSR mislead you?  Probably, but I doubt it was malicious.  Most of those CSRs aren't all that good at what they do.

I've used those promotional offers before.  In fact the last one was through GE.  Anyway, I have yet to see one where the minimum due on my statement was adequate to PIF before the promotional term ended.  In fact, IMHO,  that would make little sense. They make those offers in the hope that you WILL NOT PIF before the promo ends.  Making your minimum payment adequate to PIF basically removes that possibility.  That's not nearly as profitable.

Anyway, you did the right thing and responsibly kept YOUR eye on YOUR credit to prevent being screwed.  Congrats on no being their latest victim.