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Orchard Bank Complaint - Ridiculous late fee charges - credit card
credit card - Complaint
CITY OF INDUSTRY, CALIFORNIA -- I was offered a credit card in 2008 with a $300 limit thru Orchard Bank(HSBC Services).Big mistake! I really needed this money as my mother had kidney cancer and had to have surgery to remove one kidney and I wanted to be there and take care of her afterwards, so I opted to accept the card thinking it would help me out for the time I was with her. I paid on this card faithfully every month and only charged about $250 on the card. Then in May 2008,my husband had a heart attack and he was off work for some time and I was the sole bread winner. I called Orchard Bank and explained the circumstances and said I could not make the monthly payments as schedule but would send what I could at a different date each month but when the bills started piling up and groceries needed to be bought, I could not pay anything and called them again. They told me they would waive the late fee if I sent in $75.I did and they did waive the fee but then they added fees to the next few months I could not pay, which I thought they were waiving fees until I could get back on track and my husband got back to work. Now I owe over $900 and it is in collection. They will settle for around $750.I only charged $250 and told them I cannot pay that. I feel I was deceived and scammed into getting this card. Many people have been in this situation and it is very unfortunate that we have to be treated like this and used. Do not ever take Orchard Bank(HSBC Services) up on any credit card offers, as the late fees and interest are extreelmy high and you will never get it paid off. I was stupid and fell for this.
Comments:
Posted by fast327 on 2010-06-30:
How was this a scam?
Posted by goduke on 2010-06-30:
All credit cards have high late fees. It's a penalty for paying late. I can guarantee you that it was disclosed when you signed up for the card. What did you honestly think was going to happen when you stopped paying the bill?
Posted by Buddy01 on 2010-06-30:
It seems that the waiving of the fees was for that month only and not until you caught up.
Posted by skelly39 on 2010-06-30:
I'm sorry for your troubles, and I know how hard it can be to take care of credit card bills when you have more pressing issues, but this isn't a scam. If you weren't sure what they meant, you should have had them put it in writing.
Posted by momsey on 2010-06-30:
It's not a scam, it's a credit card. You entered into an agreement with Orchard Bank that they would extend you $300 of credit and you would pay it back to them under the terms of the agreement. I am sorry for your troubles, but troubles don't erase debts. If that were true, probably most of us would be debt-free.
Posted by justcuz on 2010-06-30:
Surely you understand that none of the CC companies would waive late fees "for a few months" right?
Posted by Stew on 2010-06-30:
So let me get this straight. You borrowed $250 but now two years later you owe $900? What shocks me the most about this is those who don't see this as a scam because quite frankly what else would you call it.
Posted by justcuz on 2010-06-30:
Stew, figure up $250 x 29.9% interest for 24 months. I'm too tired this morning but I bet you'll find your answer there.
Posted by Stew on 2010-06-30:
JC, That comes to a finance charge of $201.30. Add that to the original $250 and you get $451.30. So yeah I stand by my SCAM declaration. I don't know about other courts but in Oklahoma or Texas if you sued somebody for a two year old original CC debt of $250 aside from default judgment you'd be darn lucky to get a judgment of $400. There ain't no way in the world a judge would award $900 or $750 and I don't care what the CC terms and conditions say. Because bottom line $900 for an original debt of $250 is not reasonable. Judges, well at least in Oklahoma and Texas, are all into reasonable.
Posted by justcuz on 2010-06-30:
No, that's incorrect. It would be $250 x 29.9% which is approx $75. The following month would then be $325 x 29.9% and so on. Of course there were also however many late fees added in, and then whatever payments were made deducted, but yea I can totally see how the balance got to $900.
Of course I think all CC companies screw customers over....but it's not a scam, you know what you're getting into when you sign up, and if payments aren't made, this is what happens.
A scam is illegal, and you and I both know this isn't illegal.
Of course I think all CC companies screw customers over....but it's not a scam, you know what you're getting into when you sign up, and if payments aren't made, this is what happens.
A scam is illegal, and you and I both know this isn't illegal.
Posted by Slimjim on 2010-06-30:
I am sorry also for the troubles you incurred and I'm not going to specifically question why this was let go so long, but readers should take something important from this experience here. If you have a small balance credit card, don't default it if at all possible. The minimum payment was at the time, somewhere in the neighborhood of $10-$20. Not keeping a card like this current will still slap the same aprox $35 late fees and $35 over-limit fees as a $10,000 balance card. By the second month of delinquency, you already had (I'm guessing) $70 in fees plus around a $30 past due minimum payment. I'm not a math wiz, but pounding $70 extra in fees a month, plus the interest on them, it's not a stretch for me to see why the balance is $900 after two years.
Frankly poster, you are already in collections and they aren't going to sue you for that balance. I wouldn't pay them anything until they at least agree to take the $250 and call it settled. Maybe even look for a settlement for less.
Frankly poster, you are already in collections and they aren't going to sue you for that balance. I wouldn't pay them anything until they at least agree to take the $250 and call it settled. Maybe even look for a settlement for less.
Posted by Stew on 2010-06-30:
JC, I don't know if I agree with your math. 29.9% is an annual percentage rate and not a monthly rate. In fact for credit cards they use a daily rate which for 29.9% would be 0.082% per day.
In order to compute the future value of $250 in 24 months with a 29.9% interest rate you'd use one of the following formulas.
FV = 250 * (1+.299/12)^24 (compounded monthly)
FV = 250 * (1+.299/365.25)^730.5 (compounded daily)
I compounded monthly in my previous example. But even compounding daily the future value only comes to $454.69.
In order to compute the future value of $250 in 24 months with a 29.9% interest rate you'd use one of the following formulas.
FV = 250 * (1+.299/12)^24 (compounded monthly)
FV = 250 * (1+.299/365.25)^730.5 (compounded daily)
I compounded monthly in my previous example. But even compounding daily the future value only comes to $454.69.
Posted by Stew on 2010-06-30:
slim, that is about the best advice offered up on my3cents in a long time. What would that be +975?
Posted by Slimjim on 2010-06-30:
Just use my data stew. Simply put, if poster was late and over the limit for 24 months, than the industry common of $35 each ($70) total a month would be $1680 alone. Obviously after a while the line gets charged off and fees stop being imposed, hence the "discount"
Posted by Slimjim on 2010-06-30:
See that, we are so in tune I'm answering you before you ask. Can anyone say StewJim Nation?
Posted by justcuz on 2010-06-30:
I think you're right, Stew...I told you I was tired this morning! Slim's comment pretty much sums up where I was trying to go.
Posted by skelly39 on 2010-06-30:
Slimjim is right. You aren't counting the late fees and over the limit fees. Interest adds up on those, too. Paying the minimum payment of $10 or $15 would have eliminated the fees, but it probably would have taken the OP 25 years to pay it off, especially at that rate. Credit card companies and banks are immoral and unethical, but if you blindly say "okay" and agree to their usurious terms and conditions, it's not a scam.
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