I can across this recently and wanted to get some thoughts on it.

A little background - The Bank sent a letter informing of substantial changes to Credit Cards and sent it within 45 days.

It identifies the change in annual fee to be effective in a certain date (45 days notice) before changes occur.

Now on the last paragraph it states: (Dont get too bogged down on the months but you get the giest of such)

You will be assessed an annual membership fee at two separate times. In April, all cardholders will be assessed a partial annual fee prorated based on your anniversary date. Then on your anniversary date the new annual fee will be charged for the next 12 month period.

Example: A cardholder with an anniversary date in May will be charged seven-twelfths (7/12) of the annual fee in April for the period from Jan to April and then on the anniversary date in May the entire annual fee for the next 12 months will be charged. The cardholder will see the following charges on their statements for April and May:

April Statement: Annual Fee Assessed: $XXX.XX (old fee $35 x 7/12)
May Statement: Annual Fee Assessed: $3XXX.00 (new fee)


So the proprated is based on the old fee and then after it is accessed and the noticed went out giving 45 days notices, the credit card holder would then be access the new fee.

Any thoughts

Thanks,

I don't understand your example.

cardholder with an anniversary date in May will be charged seven-twelfths (7/12) of the annual fee in April for the period from Jan to April

How does any of this add up to 7 months????

Whoever dreamed this up needs to run for Congress.

rl

Dont make it complicated. I guess you could not read!!!!:)))

I mentioned dont get hung up on the months.

For elementary schoolers here it is:

jan 1/12
Feb 2/12
Mar 3/12
and so forth

now you understand

but I dont need you to answer. It all good.

Wish someone else brighter can chime in instead of responding like that.

Good Day

Well, if you are going to post an example, make it correct. Because unlike most people, compliance officers are a stickler for details and if the details do not make sense, then you are not going to get anyone to opine.

If you want a well thought out answer, post a well thought out question.

Unless you were previously billing your annual fee in arrears and you are now going to bill your annual fee in advance, this process makes absolutely no sense at all. You would be double dipping as the borrower already paid their annual fee up to the next due date and that would be a UDAAP issue.

Whether you can do this or not is a matter of State law, but I surely hope this was all fully explained in the change of terms notice otherwise it would appear to me to present some UDAAP issues.

Welcome to BOL

Randy, thanks for answering this. I read it 4 times and couldn't figure out what was said.

PSK welcome, but sarcasm is unneeded. "Dont make it complicated. I guess you could not read!!!!:)))"
These are professionals stopping to answer your questions. If that was asked to an attorney, even for a casual consultation, the bank would be billed at $200+ per hour.

I read it and decided not to spend my time on it, especially after the nasty reply to Randy.

Real examples are helpful to all of us, with our time limited. Otherwise, an answer is meaningless. I agree about the UDAAP issue; I can't imagine why a bank would want to hit people with a retro catchup fee and then a new in advance fee.

I can assure I will not be responding to any of psk's future posts. He has the dubious honor of being the first poster to make my ignore list.