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Sunday, November 27, 2016

Comenity Bank Wintersilks Scam

It sounds like this is a known scam, but this time it's personal.  My mother, who is elderly, occasionally buys items from Wintersilks, over the phone.  And every time, they try to persuade her to get a credit card.  And every time, she declines.  At least, that's what she thought.

Apparently, one time they got enough information out of her that they were able to start an account for her, unbeknownst to her or my father.

And then another time, they were able to persuade her to use the "card" to buy a $26 dress.  My father gets the mail, and has no idea what "Comenity Bank" is, and simply throws out the mail that comes from them.  Several months later, with late fees and interest, the price of the dress is up to $90.  My father calls customer service, and -- after about an hour of being bounced around on the phone -- is told there is nothing that can be done.  He doesn't have the time or the energy to fight it, so pays the $90 for the $26 dress.

Anyway, I just googled "Comenity Bank" and found the following list of complaints:

http://www.complaintslist.com/banks/comenity/

It seems to me to be essentially a pirate bank -- preying on elderly people who order from catalogs, creating credit card accounts for them without them realizing it, and then sending bills etc. by stealth (under a name that the cardholder won't recognize).  And then raking in the late fees.

They told my father that they serve as bank for something like 45 -- or maybe 450 -- businesses.  In my view, all of those businesses are tainted -- the catalogs they send are almost more for the sake of the bank than for the business.

Age thou art shamed!

Stay away.

If anyone has had a similar experience with Comenity Bank, feel free to leave a comment.  If you have had a good experience with them, feel free to leave a comment as well.

UPDATE Jan. 1, 2017:  After I reported this "success" to my parents, my father showed me a recent American Express Statement that he had received which showed a $14.97 charge for Wintersilks in October.  My mother had not ordered from them since July.  I called them, and learned of their VIP Plus program scam -- where they enroll you in their VIP plus program without your realizing it, and charge you $14.97 per month for the privilege.  As it turns out, this is a common practice for a whole family of brands, including Appleseed’s, Bedford Fair, Blair, Draper’s and Damon’s, Gold Violin, Haband, LinenSource, Norm Thompson, Old Pueblo Traders, Sahalie, Solutions, Tog Shop, and WinterSilks.  I spent some time documenting complaints against the other members of this family (except for Bedford Fair and Draper's and Damon's, but maybe that's just because I didn't look hard enough), and posted it all as a separate post here.

In the course of that research, I ran across this article, which reports that Comenity Bank was fined $1.5 million and required to give out over $61 million in refunds for having misled its credit card customers in various ways, including by:
Telling customers they wouldn't be charged a fee if they didn't carry a balance.
Assuring customers fee refunds would be issued to those who canceled coverage within 30 days.
Promising gift cards or account credits for enrolling in the program.
The refunds were supposed to go out in the first quarter of 2016, but from some of the comments, it's not clear that they were.  

Just for the record, the article explains that the banks at issue are "Comenity Bank" in Wilmington, Delaware, and "Comenity Capital Bank" in Salt Lake City, Utah, and that they are both units of units of Alliance Data Systems Corp.

My guess is that you would never have heard of them if you didn't open up a store credit card balance.  And it seems quite clear that their business model revolves around ripping catalog shoppers off with hidden fees.  I can't quite tell if the VIP plus program that the stores themselves are ripping their customers off with are part of the overall Comenity Bank scam, but I wouldn't be surprised.  Nothing surprises me anymore.