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First Premier is suing the feds

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Established Contributor

Re: First Premier is suing the feds


@O6 wrote:

@stan_the_man wrote:

@O6 wrote:

 

Without knowing what percentage of their cardholders end up stiffing FP or making payments that bounce, I do know that when they process an ACH payment that bounces, FP gets hit by the Fed with a fee.  Not sure how big of a fee and I'd think it is minimal, but if they have a significant number of cardholders who make ACH payments that ultimately bounce that may be why they charge a fee to make them.


I have to imaging that the NSF rate would be about the same for ACH vs. checks though.



Could be.

 

Just reading FP's lawsuit against the Fed:

 

40% charge-off rate.  Wow!  Bank of America cries like a stuck pig at 5%.

 

Forty Percent!

 

Somehow I feel less sorry for those who have no other choice than to resort to FP and pay fees out the nose.

 

 


That was actually a good read:

 

http://www.argusleader.com/assets/pdf/DF177153721.PDF

 

I personally don't like FP, but I think they probably have a pretty strong case. And, sadly, some small part of the credit universe is going to be worse off if FP loses.

Message 31 of 58
Senior Contributor

Re: First Premier is suing the feds


@minimock wrote:

Without knowing what percentage of their cardholders end up stiffing FP or making payments that bounce, I do know that when they process an ACH payment that bounces, FP gets hit by the Fed with a fee.  Not sure how big of a fee and I'd think it is minimal, but if they have a significant number of cardholders who make ACH payments that ultimately bounce that may be why they charge a fee to make them.



Didnt think of that, guess because I never had one returned LOL


 

Ditto.  Smiley Happy

 

Seriously, can you imagine the fees your bank would start charging you if they let in riffraff who gamed the system and then these people started bouncing ACH payments and defaulting on the bank?

IAALBNYL
Message 32 of 58
Senior Contributor

Re: First Premier is suing the feds


@stan_the_man wrote:

@O6 wrote:

@stan_the_man wrote:

@O6 wrote:

 

Without knowing what percentage of their cardholders end up stiffing FP or making payments that bounce, I do know that when they process an ACH payment that bounces, FP gets hit by the Fed with a fee.  Not sure how big of a fee and I'd think it is minimal, but if they have a significant number of cardholders who make ACH payments that ultimately bounce that may be why they charge a fee to make them.


I have to imaging that the NSF rate would be about the same for ACH vs. checks though.



Could be.

 

Just reading FP's lawsuit against the Fed:

 

40% charge-off rate.  Wow!  Bank of America cries like a stuck pig at 5%.

 

Forty Percent!

 

Somehow I feel less sorry for those who have no other choice than to resort to FP and pay fees out the nose.

 

 


That was actually a good read:

 

http://www.argusleader.com/assets/pdf/DF177153721.PDF

 

I personally don't like FP, but I think they probably have a pretty strong case. And, sadly, some small part of the credit universe is going to be worse off if FP loses.


Lately I have learned to dislike FP less.  Granted, I cannot say they are the best thing since apple pie & sliced bread, but it must be tough for them in a niche where 40% default and stiff the bank and another certain percentage have problems because they can't read or understand the terms and conditions of their account and / or simple finance basics.

 

If you can't even get a secured card from a credit union or bank, then where is one to go? 

 

I think of FP as a form of parole.  It's probably no fun to be on parole and it restricts your life, but there's only one reason you're there in the first place.

 

 

IAALBNYL
Message 33 of 58
Frequent Contributor

Re: First Premier is suing the feds


@O6 wrote:

@stan_the_man wrote:

@O6 wrote:

@stan_the_man wrote:

@O6 wrote:

 

Without knowing what percentage of their cardholders end up stiffing FP or making payments that bounce, I do know that when they process an ACH payment that bounces, FP gets hit by the Fed with a fee.  Not sure how big of a fee and I'd think it is minimal, but if they have a significant number of cardholders who make ACH payments that ultimately bounce that may be why they charge a fee to make them.


I have to imaging that the NSF rate would be about the same for ACH vs. checks though.



Could be.

 

Just reading FP's lawsuit against the Fed:

 

40% charge-off rate.  Wow!  Bank of America cries like a stuck pig at 5%.

 

Forty Percent!

 

Somehow I feel less sorry for those who have no other choice than to resort to FP and pay fees out the nose.

 

 


That was actually a good read:

 

http://www.argusleader.com/assets/pdf/DF177153721.PDF

 

I personally don't like FP, but I think they probably have a pretty strong case. And, sadly, some small part of the credit universe is going to be worse off if FP loses.


Lately I have learned to dislike FP less.  Granted, I cannot say they are the best thing since apple pie & sliced bread, but it must be tough for them in a niche where 40% default and stiff the bank and another certain percentage have problems because they can't read or understand the terms and conditions of their account and / or simple finance basics.

 

If you can't even get a secured card from a credit union or bank, then where is one to go? 

 

I think of FP as a form of parole.  It's probably no fun to be on parole and it restricts your life, but there's only one reason you're there in the first place.

 

 


 Prison life is structured - more'n some people care for.

 

H.I. McDonough

 

 

Smiley Happy

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Message 34 of 58
Frequent Contributor

Re: First Premier is suing the feds

First Premier suing the feds??

 

Sounds more like the Feds AND the people should be suing First Premier.. The Feds should sue them for criminal activity and the people should sue them for pain and suffering.

Message 35 of 58
Regular Contributor

Re: First Premier is suing the feds

From what I've read and experienced with First Premier, I can't say that what they are doing constitutes "criminal activity", nor did I experience "pain and suffering".  Spare us the hyperbole and look at the issue objectively.

 

They gave me a credit card when no one else would, and because of my credit history, the credit they granted came at a higher cost than someone with a better history than mine.  All the fees I was charged were clearly disclosed to me before I applied for the card.  I read the credit card agreement, which is fairly standard from what I can tell (even compared to my newer cards now that my credit has improved somewhat).  I do not believe First Premier violated the agreement.

 

Every contact I had with their customer service department was well-handled by courteous, efficient, and accurate representatives.  When I called to cancel the card, they asked why I was canceling and I honestly told them that I no longer needed the card.  They helped me start off the rebuilding process, and I was grateful that they gave me a chance. The rep said she was glad they could help, and wished me the best.

 

Is First Premier the greatest card in the world?  No.  But they are useful for what they are:  a company willing to bear the risk of bad credit consumers.  They are not devious in their fees, though some of them are certainly onerous.  But again, that's the price you pay for having bad credit.  I'll be interested to see how this case turns out.  I haven't read the law involved, but it looks to me that First Premier has a valid point regarding pre-account-opening fees.  As much as people on this board hate First Premier, they serve a valid purpose and I hope they continue on. 

Message 36 of 58
Senior Contributor

Re: First Premier is suing the feds


@ptkdude wrote:

From what I've read and experienced with First Premier, I can't say that what they are doing constitutes "criminal activity", nor did I experience "pain and suffering".  Spare us the hyperbole and look at the issue objectively.

 

They gave me a credit card when no one else would, and because of my credit history, the credit they granted came at a higher cost than someone with a better history than mine.  All the fees I was charged were clearly disclosed to me before I applied for the card.  I read the credit card agreement, which is fairly standard from what I can tell (even compared to my newer cards now that my credit has improved somewhat).  I do not believe First Premier violated the agreement.

 

Every contact I had with their customer service department was well-handled by courteous, efficient, and accurate representatives.  When I called to cancel the card, they asked why I was canceling and I honestly told them that I no longer needed the card.  They helped me start off the rebuilding process, and I was grateful that they gave me a chance. The rep said she was glad they could help, and wished me the best.

 

Is First Premier the greatest card in the world?  No.  But they are useful for what they are:  a company willing to bear the risk of bad credit consumers.  They are not devious in their fees, though some of them are certainly onerous.  But again, that's the price you pay for having bad credit.  I'll be interested to see how this case turns out.  I haven't read the law involved, but it looks to me that First Premier has a valid point regarding pre-account-opening fees.  As much as people on this board hate First Premier, they serve a valid purpose and I hope they continue on. 


+1

 

There was a time when I would have disagreed with you, but not now.  Thank you for a very logical and balanced synopsis.

 

As for their case against the Fed, I wouldn't put their odds at higher than 50 / 50.  Any time you are suing the government you have an extremely heavy burden.  Hopefully, though, FP prevails. 

 

I did surf over to their site and you are correct; they hide nothing.  The complete fee structure is laid out for all to see and, barring learning disabilities, clearly understand.  That they have a 40% default rate is astounding.  FP is running nothing less than a boot camp for financial misfits.

 

IAALBNYL
Message 37 of 58
Valued Contributor

Re: First Premier is suing the feds

i just don't get it! why would anyone perfer an FP card, when you are likely to aquire a public secured card, orchard or some store credit cards with bad credit. jcpenny gave me a credit card when no one else would. i had a fico of 580. i also got several gas cards after this. publc secured actually advertises no credit check. fp just makes you look bad, even if you are responsible with it.

 

look, i know that the credit market is tighter than it used to be, but i just cant see why anyone that is responsibly trying to build their credit bother with this.

 

look at lilmirth. she has stellar credit now. but she made a wise choice to start out with by having a BofA secured card as she could not aquire unsecured major credit. but look at her now; in such a short period of time, she has built over 80k in unsecured prime major credit! good for her.

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Message 38 of 58
Established Contributor

Re: First Premier is suing the feds

When DW had FP before we got married and she started really rebuilding. I was one of the people who thought that anyone can get credit, and I was wrong.

 

She was actually for a HSBC/Orchard CC and a secured Citibank CC -- even though she had +650 Ficos at the time (thank goodness for nearly two dozen paid as agreed student loan trade lines).

 

I think FP plays an important role in the marketplace as basically of lender of last resort; however, I don't think every one of their customers needs them.

 

 

 

 

Message 39 of 58
Senior Contributor

Re: First Premier is suing the feds


@scottwagnon wrote:

i just don't get it! why would anyone perfer an FP card, when you are likely to aquire a public secured card, orchard or some store credit cards with bad credit. jcpenny gave me a credit card when no one else would. i had a fico of 580. i also got several gas cards after this. publc secured actually advertises no credit check. fp just makes you look bad, even if you are responsible with it.

 

look, i know that the credit market is tighter than it used to be, but i just cant see why anyone that is responsibly trying to build their credit bother with this.

 

look at lilmirth. she has stellar credit now. but she made a wise choice to start out with by having a BofA secured card as she could not aquire unsecured major credit. but look at her now; in such a short period of time, she has built over 80k in unsecured prime major credit! good for her.


 

As much as store and gas cards help, there is a ding for not having a major credit card.

 

I am not sure about Public, but the fact is that Orchard does not approve just anybody and Bank of America is almost as selective for their secured card as other banks are for their unsecured products.

 

For unsecured credit, FP is often the only option available to some.

 

 

IAALBNYL
Message 40 of 58
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