@Anonymous wrote:They might have found that those resources can be allocated elsewhere in a much more profitable way, so closing and losing accounts that might provide them pennies could be used to get dollars, and many of them. If that's the case, they can't close accounts fast enough.
... Well, maybe they need the government to shut them down fast enough to give them a taste of their own medicine. Anyone affected could file complaints with the Consumer Financial Protection Bureau (CFPB) or The Office of the Comptroller of the Currency (one of whose duties is to ensure fair and equal access to financial services to all Americans.) Especially if they don't have legitimate reasons on enough sample cases that could be reviewed, it might lead to restrictions on this type of malfeasance in the future.
@RSX wrote:"I think the problem is that "normal" people don't have 6 sync cards in the first place to be shut down."
Sync went aggressive buying up other lenders over the last 5 years. I know 2 of the 4 I had were GE and Orchard before Sync took them over. So it isn't a case of someone voluntarily opening multiple cards with one lender
plus they are mostly store cards, so the 'normal' person wouldn't even know who the issuer is or care
^ ^ ^ ^ ^ This ... +1
I would bet most non-MyFico people don't notice which banks issue their cards.
I don't have Synch cards so I don't have a dog in this fight. But I see this kind of massive shutdown on people as incompetent, not to mention abusive.
I realize a lot of this is store-card related, but why make excuses for them because of that? One list I saw said Synch offers 116 different store cards!! Because of the huge numbers of different store cards they offer, both Synchrony and Comenity both have some unique responsibilities when it comes to underwriting. You simply don't see this level of mass closure like you do with other major banks. IMO, if they had thought this through more carefully in underwriting, they would have limited the number of cards and amount of credit lines one consumer could qualify for at one time. Determining how much is enough and how much is too much should be the BANK's job, not the CONSUMER's. They obviously failed to have to resort to such drastic actions. As people applied for different new store card accounts, the overall limits should have been reduced or they should have specified how many accounts they would allow based on profile parameters. They overextended themselves, then lashed out at their customers to "fix" it when the initial problem was the whole way they allowed it to develop. It's flawed.
Personally, I've never had this type of lender reaction but this general type of crap is why I no longer want to mess with store cards. Store cards are much more sensitive to CLD or closure if not used frequently. They're often only useful in one store or a small group of stores. Interest rates and fees are outrageously high. Credit lines are often low relative to credit profile. And they will bombard you with advertising once they get your mailing address, email, or phone number to tell you about every sale or promotion offered. Major bank cards are just easier to manage and more stable to me.
@Anonymous wrote:The point is that the average person doesn't have 6 cards period, much less 6 with a single issuer...
I disagree that the point is how many cards someone has overall or with a single issuer. While many on My Fico do have more than the average number of accounts, remember that most reputable banks still have a buffer on what is tolerable and acceptable to their risk so that we can't just march into Chase or Bank of America or Wells Fargo and qualify for the levels of credit that Synchrony sometimes approves.
So the real point is ... who allowed (approved) someone to have six cards with a single issuer? Someone doesn't get six cards without getting approved by the bank's underwriting, or lack thereof. And who determined what credit limit someone qualified to hold? Did they? Or did the bank?
And as pointed out upthread, over a period of time some people may apply for cards with Old Navy, Ethan Allen, Chevron, and Lowe's ... four completely different and apparently unaffiliated business. Turns out, all four of those are Synchrony cards. You and I may know about this and know it is buried in the fine print, but it's often invisible to the average consumer. It's just another card to them until they all get shut down. (And don't say this only happens to us on My Fico; we're just the ones who are posting about this behavior, so do you really think it's not happening to average Joe Consumer on a lesser level?) So far in this thread, I haven't seen any evidence of anything that anyone did that was so catastrophic to risk that it merited shutting down huge amounts of their credit all at once. It was completely avoidable, from the way Synchrony approved the cards as well as they way they cancelled them.
I don't understand defense or justification of this behavior and when banks do this, they should have to answer for it. The problem is, they know they don't have to answer for it so they victimize consumers in the process due to their carelessness and irresponsible business model. Consumer protections and underwriting need to be strengthened.