Chase Sends You Debit Card You Don't Need, Tells You To Activate It
Chase isn't just acting in shady ways toward their credit card customers. Their latest sneaky move is sending new debit cards that impose fees to their banking customers, hoping that customers will simply activate the new debit cards with no questions asked. Not so fast.
Robert's fiancee received a new card in the mail from Chase, and had the presence of mind to call the bank and ask what was going on.
Yesterday, my fiancee received an envelope from Chase (her bank). Inside was a brand new debit card with a stick on it that says it is replacing her old card and to activate it immediately. The two cards looked almost identical. The only difference between her old card and the new one is that the new one had the phrase "leisure rewards" in small letters on it. My fiancee immediately called Chase to find out why she was sent a new card when her old one hadn't expired yet. The Chase rep, who my fiancee says was kind of rude (and attempted to upsell her on a credit card while helping her out) told my fiancee that she did not have to activate the new card, it was optional. By activating the new card, my fiancee would be enrolled in a new debit points program where she would gain four points for ever dollar she spends (except that the program will not award points for any transaction that uses the PIN, effectively ruling out most uses of a debit card). On top of that, there is a 25 dollar a year fee for using the new card.
I just think its a bit shady for Chase to send (unsolicited) new cards out to people that look almost identical with instructions that they are to replace the old cards and activate immediately when these new cards only generate new fees for the card holder.
A $25 fee for a debit card? Nice one, Chase. Learn from this story, and read the fine print and/or question every new thing that your bank sends to you. Just because they send you a new debit card, that doesn't mean you're required to use it.
(Photo: hagner_james)
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I started a chase account a couple weeks ago, they gave us the full rundown on the various awards cards options as well as regular debit cards, and were very above board about it.
@personnext: "I pay $60 a year for a debit card from Citi that earns by AAdvantage miles, and it is well worth it."
There's no way I would pay a cent for a debit card.
Way I see it, I'm reducing bank workload by using their debit card versus writing checks for everything, which I can very easily do should they suddenly decide their debit card is worth a fee. They should be grateful I'm WILLING to use a debit card for FREE, instead of charging THEM.
@personnext: Just a spammer pushing an ANTI-consumerist website (WTF?).
Let's get this guy banned and just move on, shall we?
"the(no space)anti(a hyphen)consumerist.blogspot.com"
Don't go to the link above, as it is assuredly filled with bad advice and other creepiness of the internet.
I enrolled for the Leisure rewards program. I use my debit card so frequently that with the cashback rewards i choose it more than covers the fee. And btw, you always have the option of doing a non-pin purchase. just hit "cancel" on the machine when it says to enter the pin, and it will go straight to credit. So for us (my fiancee and I) it's a great program. Your gf probably accidentally enrolled in it. or something.
Consumerist explains this all the time. That the bank pays when you choose debit. The store pays when you choose credit. That's why banks throw rewards your way to push 'cancel' when it asks for your pin and choose 'credit.'
for me, the leisure rewards program works bc i use my debit card everywhere, always forego the pin option, and then choose cashback rewards.
@personnext: I too suspect that there might be more to the story. But I have a much better attitude towards it than you.
Also, whats with you and bashing Consumerist editors every time. If you really dislike what they have to say, feel free to not read. They'll be glad to let you go with a graded ETF ;)
My gf was enrolled in this program recently and they didn't mention anything about pin-based transactions not applying towards the rewards. I'm going to have to look into this.
Since this is "Unsolicited" mail, sent through the USPS would the rules of "Unsolicited" mail apply. You wouldn't have to pay, or anything.
I got one also but mine was a business debit card with my name on it. I don't own a business but they said by my spending habits they thought I did. I had them cancel the thing mainly because I memorized my current number and don't want to have to remember a new one until 2011 when it expires.
I have a similar reward program through Visa but on my Visa debit card through a different bank. I don't pay for the pleasure (at least not yet) and since I use my debit card for everything (always with the a signature not a PIN) I rack up serious points.
No problem with the card or the fee but to provide anything less than full disclosure is shady. If Chase had sent the card with information that there was a fee and how the program worked, I would have no issue. I also think that sending unsolicited cards is not right but here the OP is already a Chase customer.
I think this story illustrates why most adults should have accounts at several banks, credit unions and/or other financial institutions. At last count, I have accounts at nine different entities (I know, insane!), but the moment one starts acting up, I can simply go to one of the others and use their product(s) instead.
Disclosure: I work for a bank, think credit unions are great, and only have a rarely-used account with my employer. It's not that they're bad, I just like where I'm at.
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@Darrone: It's actually worse than that. It's not creepy at all. It's just lame. It takes the work done by Consumerist writers and offers half-assed snarky little replies that basically amount to: "NUH-UH!"
The first and last time I peeked at it, s/he had a whole 5 hits.
It's all very.. meh.
@Well-Dressed Geek:
Can't you switch financial institutions without already having an account there? That seems like a strange reason to have 9 accounts. Of course, I live check to check and can barely justify the checking and savings accounts I have!
@veg-o-matic: The funny part is that I clicked on this guy's name to see his posts and saw "personnext has no friends." So sad, but probably true.
If she had a Wamu account, the Chase debit card probably replaces her Wamu debit card. Chase is in the process of changing the Wamu logo.
Wells Fargo pulls something similar. I signed up for a free checking account. Every single time I spoke with a rep, whether it was a teller at a branch or a person on the phone, I was told that they "noticed that I hadn't signed up for the rewards program yet", and asked me if I wanted to. I never said yes because I was usually in a hurry.
Then one day I found myself in my local branch office making a deposit during a particularly slow time. I was pitched the rewards program again, and I decided to sign up. A few days later there was a charge on my credit card of $20 or so. Never did ANY of the reps I spoke to discuss this charge with me, or mention that the rewards program had any cost associated with it.
Evidently, they just sign up as many people as possible and hope that they either don't notice the charge or don't care enough to dispute the charge.
@SaranyaLachesis: Yeah I did the same thing too. It was worth it. In 2 years of it, when I had chase, I got $175 worth of gift certificates. So it was worth the $50 for 2 years. But I dropped chase like a bad habit. That was the only good thing from them, because I knew I'd use it.
@BZMedia: nevermind that every time you use the debit card, they *make money* from the merchant where you swiped it.
@G'osh Berliner: Commenters on articles may "explain" this, but I've never seen a Consumerist article addressing the interchange fees. And if there was one and it stated what you've posted above, then it was wrong wrong capital R wrong.
I would LOVE to see a Consumerist post talking about all this, but in the meantime .... At a VERY basic level, the interchange fee is paid by the merchant's bank to the customer's bank. How that actually gets charged to each of the many parties in a transaction can be quite convoluted, although there's a somewhat decent explanation at the Wikipedia article.
Aside from the divvying up, the fee itself varies based on the type of transaction - "Transactions made with credit cards generally have higher rates than those with signature debit cards, whose rates are in turn typically higher than PIN debit card transactions. Sales that are not conducted in person, such as by phone or on the Internet, generally are subject to higher interchange rates, than are transactions on cards presented in person."
The issuing bank (i.e. the customer's bank) thus has a reason to push for signature debit transactions; this is also why some "free" checking accounts require X number of signature debit transactions per month to avoid any fees.
@eabu: No. I had WaMu and Chase sent me a normal, regular debit card without fees several months ago. The OP is talking about something different.
My Wells Fargo debit card has a program like this, but its free. .(not sure what Zeniq got signed up for) The catch is you accumulate points very slowly and need hundreds or thousands of them for redemption for gift cards, etc.
The old Wamu program was free.
And the catch by using "credit" is that if you do any returns, the stores will put a hold on the trx as opposed to giving you a refund asap. (Home Depot did anyway).
Similarly, I received a new debit card in the mail not too long ago from my Credit Union. It had the same number, new exp. date and new security code on the back (the point of which I have never understood, but whatever). It had a letter with it, explaining that one of the major companies handling CC transaction information had had a serious security breach and so they were sending out new cards to everyone. I made sure to double-check this by calling my bank (and always remember to look up their number yourself and not just call whatever is in the letter that came with it) and it turned out to be legitimate. I also found news stories corroborating the security leak. Anyway, just another vote to always double-check un-solicited bank communications/changes!
@Well-Dressed Geek: I have had a checking and savings account with WaMu(Chase) and with my credit union for about a year and a half. I was using my WaMu accounts pretty heavily until a few weeks ago, when I switched my direct deposit to my credit union checking account. I canceled my WaMu savings and transferred the money into checking, then used the checking account for bills and groceries until I got it down below fifteen dollars. I won't cancel it altogether because I don't want to cancel such a long-standing account. (It's not as though I have much a credit rating anyway, since I don't use credit cards. My applications always get rejected with "insufficient credit history", so I don't bother anymore.)
@tbax929: My own situation is certainly the exception, not the rule. The big idea is that you have your main accounts at bank A (or CU A), another account at bank B, if bank A pulls crap like above, then you can easily transfer money electronically from A to B and perhaps even setup additional accounts via phone. There's a certain amount of "paperwork overhead" that goes into switching banks, but it tends to take less time to just open an additional account. No, you don't need accounts at nine banks, but having at least two minimizes the chances that your bank can hold *you* hostage.
@SnowingCookies: OK, technically that does "address interchange fees". But the posted information in no way gives the misinformation about who pays what, which is really what I was trying to address. (and I sure don't have time to read all the comments to see if the bad info was spread there, yet again.)
Bottom line is that every time there is a discussion of the various fees involved in card transactions, a lot of just plain wrong information hits the comments. As with everything else, a "good Consumerist" will take the time to learn the truth instead of relying on the internet. And that includes my post above - while I am sure of its truthiness, it should only be used as a starting point to learn how the fees work.
I'm a member of the liesure rewards program through chase. Nearly 100% of my purchases are made via my chase debit card (rang as credit), it's actually incredibly worth it for me to pay the $25 anual fee, in six months I've already earned $150 worth of rewards (I tend to choose visa gift cards which are worth slightly less dollars per point than their other rewards, but their other rewards kind of stink).
That being said, this is a very very shady way to do business.
@MostlyHarmless: As a history lesson to everybody and myself, as I didn't know this. According to Wikipedia:
"Chase National Bank was formed in 1877 by John Thompson. It was named for former United States Treasury Secretary and Chief Justice Salmon P. Chase, although Chase did not have a connection with the bank."
Chase National Bank later became Chase Manhattan Bank which later, after a merger with JPMorgan, just became Chase.
@personnext: I thought once the moderators disemvoweled someone, that person couldn't post anymore. Is there some sliding scale? This would seem to be a recurring problem with this particular poster. Why don't the moderators take care of it once and for all?
I can't seem to come up with any sort of relevant comment the mods will approve-I'm assuming this has something to do with my being from an entirely different planet and having some form of alternative thought process... How do you get approved and them disemvoweled? Do I need to plug something? Use obscenity?
OK-Di te Perdant Chase!
(how am I doing?)
I'm with Wigly. I just had a hundred dollars deposited into my account by Chase last week (yup..they'll give you case in lieu of the gift cards). Paying with my card just became a matter of habit. With the blink card, just about everything is charged as credit. Couldn't be easier.
That said, I redeemed my points only after I stopped into a Chase branch to change my address and the CSA looked over my account. I was then subjected to some really hardcore upselling for some truly ridiculous promotions.
Lottery to pay off my credit cards? Please.
I'm a former Wamu customer. A couple of months ago I changed my last name (was married last year), and they sent me new cards (I have two for separate checking accounts) with the Chase logo on them. Then the other day I get a letter from Chase with one new debit card (just for my personal checking), but with my maiden name on it. This article has prompted me to look at it more closely. But, in any case, I'm seriously considering switching banks, just as soon as I find a new one I like.
@MostlyHarmless: But he's Australian and SO yummy...except in recent times when his hair is a little scraggly and he's all "ooooooh Cameron I love you, get rid of your dead husband's sperm!"
Back on topic: Chase debit tricks? Lame. So lame.
@squinko: Yaaaaa if disemvoweling meant a lifetime banning, me and MostlyHarmless and Trai_Dep and about a thousand others would be MIA after "Th NR ncdnt".
Oddly enough, my Chase Freedom card has had its due date pushed back... twice now. My Chase BP card? Had its due date moved up a few days. Thankfully, they haven't been canceled yet.
I really don't see Chase's grand strategy here, but I'll bet it's a clever scheme worthy of the Golden Shit award.
@Laura Northrup: IIRC, our Interac system is based on one of the debit networks you folks use - and there are merchant fees, usually a flat $0.25-$0.35 per transaction. Some seedier places pass this on to the customer, but are required to explicitly disclose it if they do.
Chase just tried to do something similar as well. I had to go into the branch (to deposit an international check), and while I was there, I figured I'd ask for a new debit card since the mag stripe on my current one was toast. The teller kept trying to up-sell me on this new card, and I had to keep telling her no, and with ever-increasing curtness. I finally told her that I just wanted a plain-vanilla debit card, and if she couldn't or wouldn't order me one of those, I'd be withdrawing all of our funds, close our accounts, and walk across the street to the BoA.
I'm starting to think that the tellers have MBO's for how much they have to upsell people into additional 'products'.
I had a similar thing happen to me, however, I requested to have the card sent to me (after being pressured by a bank teller). When I got the card I reviewed the fine print and decided I didn't really want to enroll in the program. The information that came in the envelope said that by activating I would be agreeing to enroll in the program. I shredded the card without activating it. About two weeks later Chase charged me the enrollment fee. After a quick phone call they reversed the charge - so it was only a minor inconvenience for me.
However, later that month my gym membership which I signed up for on my Chase debit card stopped being automatically charged. Each month I would go to the gym and explain that my payment information should not be changed in their system. The gym owner told me the gym has an "account updater" that keeps pointing their payment system to the account number of the card I never activated. After a few months of missing these payments and fixing them the gym has threatened to stop waiving the late fee each month unless I take care of this problem. I spoke with several chase representatives about this and they have no idea how to fix it or why it's happening. So I guess I'm stuck with a phantom debit card.
@H3ion: Unsolicited cards, even to customers, is still not right. If a card is on the way, I want to expect it and know that it was supposed to arrive. Roommates, family members, mail carriers, maybe even the building super - there are lots of ways that mail that's supposed to reach me ends up getting lost/stolen/thrown out by accident. If one of those letters contains a debit / credit card, I want to know that it is floating around somewhere.
Several years ago, I remember getting separate letters in the mail saying "we sent you a credit card to replace the one that's expiring in a month. Did you get it?" I appreciated that. I haven't seen one of those in a while. I HAVE received a lot of replacement cards that they send just for the hell of it when the card color changes, or they put a chip in it - even though the old card is fine. That bugs me.
Nice one, Chase. Also, whats with the name? The Chase guy on House was a brownnosed douche too. (Sure, he had his moments, but still...)