Does the credit card company violate
My girlfriend used a credit card promotional convenience check to deposit into her bank checking account. The check has cleared, but for safety sake, the bank contacted the credit card company to see if the
check has cleared, and also disclosed to the credit card company my girlfriend receive unemployment pays. The credit card company's security department late sent an indemnity agreement to the bank,
alleging that the proceeds were obtained by the accountholder or others unlawfully, resulting in a loss to the company. The bank returned check back to the credit card company. My girlfriend
immediately contacted the security department of the credit card company. The director of security department acknowledges this is nota security case but she is just "high risk" and will let
the credit department handle the case. The bank that my girlfriend deposited check in froze my girlfriend's account and requested it to be closed.
The credit card security director also called a few other banks that my girlfriend has accounts with. This caused one bank blocked her account and she cannot withdraw money, though this was temporarily
solved through a long day of argument. My girlfriend feels one or two banks now regard her somewhat like a criminal. My girlfriend called the credit company security director for a written explanation, but he shunned away and said would not give anything in writing. My girlfriend has never paid any credit card
company late as supported by credit reports. Recently she received unemployment pays and has built more credit card balances. But these should not be bases for false allegation of unlawful behavior, and slandering her credit.
Are there violations by the credit card company? If so, can she demand some compensation from the credit card company, e.g. -- my girlfriend considers offering the card company a deal: she pays off all balance
minus a portion in a couple of weeks; the card company deducts a portion of thousands dollars from balance for its violation; no negative will be reported? Please help. Thanks!
The indemnity agreement means that if it turns out that your girlfriend legitimately obtained the check, and the bank is obligated to credit her account, the credit card company will indemnify the bank. The reason the company signed the agreement was to get the check back. It was not proper
for the bank to send it to them. The bank was obligated to either (a) process the check through the drawee bank, (b) return the check to the payee, or (c) give it to the police. If your girlfriend did not at any time in any way make any misstatement to the credit card company, and if the
amount of the check is significant, then your girlfriend should write a polite, businesslike letter to the bank instructing them to either credit the amount to her account or give back the check. Certified mail, return receipt, keep a copy of the letter. When they ignore the letter, sue in small claims. They will have no defense, since they did not process the check through the drawee bank. If the amount is insignificant, drop the matter, find a new bank.
If your girlfriend did not at any time in any way make any misstatement to the credit card company, then yes, the credit card company was wrong to disparage your girlfriend's credit. She can demand anything, but don't expect any response. She can sue for defamation, but that would be
expensive and probably futile unless you have proof of your statements about those calls to the other banks. She can try small claims, but the credit card company might kick it up to superior court.
There may have been a violation of the Fair Debt Collection Practices Act, but I don't know anything about that.
Sounds like the credit card company is claiming that your girlfriend misused the "check" by depositing it in her bank. They may or may not be right; if they're right, they didn't defame her or do anything else wrong. The unsolicited promotional "checks" I often get come with restrictions that allow them to be used only for balance transfers, merchandise purchases, or the like, but not for turning into cash. Her converting one to cash by depositing it in her bank may well have violated the restrictions on the "check". If this is so, her action may be a breach or misrepresentation that would justify bouncing the "check"; I doubt she's so sophisticated that she knew enough about
what she was doing to escalate it to bank fraud. And banks get really wary around customers who have accounts closed for bouncing checks; if she's unlucky, she's already in Chexsystems' records and will have the devil of a time getting a new account elsewhere.
Figure out whether your girlfriend is as innocent in this as you think -- whether her use of the "check" was permitted by the terms it came with -- then get her a good lawyer to clean this mess up.
It was not only "improper" it was illegal, as was divulging personal
information.
The bank is in violation of the Federal Privacy Act and FTC banking
regulations.
Send a letter to the bank, with a copy to the FTC and your State's banking department demanding full restitution and damages plus clearing any unverfied information from her credit reports and any inter bank informational reports.
The credit card company may be liable, but it was the bank that broke several laws.
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