Sleazy Credit Card Come On

[Skeptic Ginger]

So my son is now starting to get the credit card offers, he got his BS in math last spring. One in particular that came a few days ago really irked me. Instead of clearly stating it is a credit card application, it has the university's logo on it and on the letterhead. It says "activate your refund preference today". "Log in ... Set up ... [and] Choose ... the refund option that is best for you." "This powerful tool is the key to unlocking faster refund delivery"

It has a MasterCard plastic card enclosed with a fake magnetic strip on the back, otherwise it looks realistic, like all you need is to "activate it".

It implies very clearly that my son should expect some money by "setting up" the card.

But he doesn't have any refund due. And he recognized it was no more than a credit card application.

It's a pet peeve of mine when advertisers use deception as their sales gimmick. This one is particularly egregious appearing to be connected to the university somehow. I've not yet asked if the university gets any kind of kickback here. And if they do I wonder if they give a rat's ass that the application implies there is some refund my son was unaware he was due when no doubt the card company knows full well there is no refund due.

Yes, my son saw through the scam. But then, I've taught him to look for such deception. Clearly this is a successful deception tactic or they wouldn't likely be using it.

The source is cited as "WWUChoiceCard.com" "HigherONe" "Bancorp Bank"

 

[Skeptic Ginger]

Here's more of the lie:

It all started in 2000 when three college friends had an idea ... what if a conventional college ID card's purchasing power could be expanded for off-campus purchases, helping simplify student finances?

Since when do college ID cards have purchasing power?

They go on to claim

a benefit to school administrators in addition to just students in order to make it a viable business.
Ah, the refund process!

Noticing how frustrating it was for fellow students to get their refund money (often waiting in long lines) and how labor-intensive and costly the process was for the school ... Higher One was born.
Fast forward 10 years and Higher One now offers two suites of online financial services customized solely for the higher education industry: OneDisburse® Refund Management® and the CASHNet® suite of payment products.

Call me skeptical but this sounds like no more than direct deposit scheme that wouldn't lessen the administration costs of refunding student fees any more than just giving the school a bank account number to directly deposit the refund into. IE, more lies.

 

[Madalch]

If it's using the university's logo, show it to the university's Marketing Department. They'll have their team of legal dobermen on it faster than you can say, "Give a rabid dog a bone".

 

[jasonpatterson]

Since when do college ID cards have purchasing power?

I could put money on mine in 1996 when I started undergrad... Most universities use their student IDs for the cafeteria/convenience stores/bookstore/etc.

Not disagreeing with the point that credit card companies do all sorts of sleazy crap and that the phony refund offer your son was given is a prime example.

 

[slingblade]

I could put money on mine in 1996 when I started undergrad... Most universities use their student IDs for the cafeteria/convenience stores/bookstore/etc.

Agree. I could load mine for on-campus purchases as well, in 2001 when I began my undergrad.

 

[Vermonter]

Just chipping in here - as an undergrad a few years ago I could load cash onto my student ID card and make purchases with select businesses - basically a handful of pizza places and other food joints.

 

[Darat]

Just had to have a look into what this "refund" is - and you are right it is deceptive: https://wwuchoicecard.higheroneaccount.com/student/features/features_refunds.jsp

On the page that explains what the "refund" is there are some testimonials. This one caught my eye:

I think Higher One is an excellent way to let college-age students learn to manage their money, without the many confusing and unfair tactics that banks use.​

Perhaps the idea is to introduce the students to the "..confusing and unfair tactics that banks use.."

 

[The Mutha]

My daughter attends the University of Houston. Each new student is issued a Visa card with the UofH logo on it that can be used as a debit card anywhere Visa is accepted. The card is linked to their financial aid account. Mozelle's student loans are deposited into her financial aid account and anything left over after paying off her tuition and fees can be accessed as a traditional debit card at any ATM. Any refunds from UofH are applied to the card. She can even get cash out from the school's ATMs, if she has any money on the card.

She also has a student ID that money can be deposited toward for purchases at any of the eating venues, vending machines and the book store. She just swipes the card at check out or in the vending machines and there ya go.

Neither of these allow for a negative balance. You can spend what you have on the card, but no more.

 

[Ferguson]

While I was at Michigan State, I took a few classes at LCC in the summer, and part of the "Welcome" stuff they sent me included the setting up of a Higher One account to get my refunds.

http://www.lcc.edu/studentfinance/faqs/higherone_faqs.aspx

Apparently you could also have them ACH it to another bank account, but I wasn't aware of that at the time, apparently. Presumably the colleges are getting some kind of kickback for it, but it was just a debit card, I never paid any fees or anything.

 

[Skeptic Ginger]

My daughter attends the University of Houston. Each new student is issued a Visa card with the UofH logo on it that can be used as a debit card anywhere Visa is accepted. The card is linked to their financial aid account. Mozelle's student loans are deposited into her financial aid account and anything left over after paying off her tuition and fees can be accessed as a traditional debit card at any ATM. Any refunds from UofH are applied to the card. She can even get cash out from the school's ATMs, if she has any money on the card.

She also has a student ID that money can be deposited toward for purchases at any of the eating venues, vending machines and the book store. She just swipes the card at check out or in the vending machines and there ya go.

Neither of these allow for a negative balance. You can spend what you have on the card, but no more.

Would the students all get a card if they had no financial aid? And what if the aid was all grants or scholarships? My son never had a financial aid account. His college fund was enough for the first 4 years. Makes me wonder, however, who is paying for the credit company's profits in that arrangement. It sounds like the financial aid you speak of was a bank loan as opposed to the old government sponsored student loans. The card makes sense if it is connected to a bank loan.

But if a bank loan is not the only criteria, then who is paying for the bank's profits and do the students or the scholarship sponsors pay an additional price because the the university turned over some financial administration services to the banks? Or is it a wash or less costly than if the school administers the accounts?


While my debit card is also a 'credit card' I was surprised when I actually used it that way once that it was no different. Instead of a bill, the money was taken out of my bank account just like when the debit card was used. Perhaps the bank just got an additional fee from the merchant that would not have been charged if I said it was a debit card when I used it.

That was WA Mutual, now Chase Bank. I closed those accounts and opened credit union accounts after the recent financial crash. Chase Bank's, aka JP Morgan's, actions seemed very unethical to me so I changed banks. Of course my credit union debit card still has a credit card function. But after that one experience with WAMU, I never use it as a credit card.

 

[MoeFaux]

I was surprised to learn my dinky ol' community college ID could hold money. Fancy. But really unnecessary. Do we have to be trained to reach for plastic?

Meanwhile. I loathe those credit card tricksters. It's sleazy, that's for sure. Why would anyone want to go into "business" with a company that is practically lying from the get-go?

 

[Skeptic Ginger]

While I was at Michigan State, I took a few classes at LCC in the summer, and part of the "Welcome" stuff they sent me included the setting up of a Higher One account to get my refunds.

http://www.lcc.edu/studentfinance/faqs/higherone_faqs.aspx

Apparently you could also have them ACH it to another bank account, but I wasn't aware of that at the time, apparently. Presumably the colleges are getting some kind of kickback for it, but it was just a debit card, I never paid any fees or anything.

As for the 'purchasing power' of one's student ID, it would appear to be more of the deception by BankOne. (Or really Bancorp, because there are only a couple of companies behind all the cards: American Express, Bancorp, JP Morgan (Chase Card Services), Citibank, DiscoverCard. Did I miss any?). A debit card is a debit card. It has the "purchasing power" you put on the card or in the account. I would think students can use regular debit cards at all the school locations one could use the student card or cash or a regular credit card.

Some one is paying somewhere along the line or the card companies would not be marketing like this. There has to be profit in it. If the school administers the student ID card accounts, chances are they collect their costs out of the school's budget which comes from tuition and taxes. But those fees don't include profit. The bank has to be taking an additional profit somewhere. I doubt the additional deposits are the only benefit the banks are getting here. Certainly the amount of money deposited has the potential to be substantial, but credit cards are much more profitable than the passive benefit of deposits.

 

[Skeptic Ginger]

I was surprised to learn my dinky ol' community college ID could hold money. Fancy. But really unnecessary. Do we have to be trained to reach for plastic?

Meanwhile. I loathe those credit card tricksters. It's sleazy, that's for sure. Why would anyone want to go into "business" with a company that is practically lying from the get-go?

That's my reaction to any advertisement that is deceptive. And so many of the ads related to any financial service seem to be heavy on the deception.

 

[Dunstan]

Meanwhile. I loathe those credit card tricksters. It's sleazy, that's for sure. Why would anyone want to go into "business" with a company that is practically lying from the get-go?

I'm not sure we have much choice. I don't know that I've ever had a credit card company that didn't engage in some questionable marketing practices. I did finally manage to get one of them to stop calling me every month (usually at 8 am on a weekend when I'm trying to sleep in) pestering me about enrolling in their free* credit protection plan**.

I think I still get calls for the various free* "membership rewards" programs, but thankfully they mostly seem to call when I'm not home.

If anyone knows of a reasonably reputable issuer, I'm all ears.

*-- For the first three months. After that, unless you fill out the appropriate form in triplicate and jump through several other hoops, you'll be billed monthly.

**-- Which only "protects" your credit from that issuer. In other words, you're paying to buy them insurance against you defaulting.

 

[The Mutha]

Would the students all get a card if they had no financial aid? And what if the aid was all grants or scholarships? My son never had a financial aid account. His college fund was enough for the first 4 years. Makes me wonder, however, who is paying for the credit company's profits in that arrangement. It sounds like the financial aid you speak of was a bank loan as opposed to the old government sponsored student loans. The card makes sense if it is connected to a bank loan.

But if a bank loan is not the only criteria, then who is paying for the bank's profits and do the students or the scholarship sponsors pay an additional price because the the university turned over some financial administration services to the banks? Or is it a wash or less costly than if the school administers the accounts?
QUOTE]

I don't know about anybody else, but Mozelle got the card her first semester there and it arrived before her financial aid was in place. Her student loans are strictly government loans, not private loans. I know that scholarships, grants, etc. are applied to the student's account which pays towards the tuition and fees. If there's any money left over, it goes on the card. The card is a debit card in that you can't go into debt with it like a regular credit card. But it can be used anywhere that Visa is accepted. I have no idea how money is made off the card as there are no obvious fees to the student. Any refund from the University, i.e., a refund on a book that wasn't needed, is put onto the card.

The Student ID account appears to be an internal function of the University as it's only good at select locations at UofH campuses. You can't get cash from it at an ATM either.

 

[Skeptic Ginger]

Apparently, I am not the only parent or student to complain to WWU. I got this email from the university today. While it implies the questions/complaints had to do with the refund process, I have no doubt that students with no refunds due were unhappy with the deceptive credit card applications. Restores my faith in college educated youth.

Here's the whole email message since I cannot link to it (sans the FAQ on the refund process):

DATE: September 20, 2011 9:24:09 AM PDT
WWU Official Communication - More info regarding Higher One Choice Card
Dear Parents,

Earlier today, we sent the below email message to all Western Washington University students, and we wanted you to be aware of this information as well.

-----

Dear Western Students,

By now you should have received your WWU Higher One Choice Card in the mail. This card is part of a revised online refunding process that Western is starting this fall. The intent is to streamline the refunding process so that you have quicker access to your financial aid and other refunds. Since the cards were mailed,some students have expressed confusion and frustration regarding this new option. We think these concerns are valid and we are hard at work responding to questions and clearing up any confusion.

Our number one priority is that every student receives their refund money this quarter as quickly as possible. Student Accounts is well aware of the challenges students are facing in setting up their refund choice and are available to help with individual concerns and any extenuating circumstances. Student Accounts is located in Old Main 360; the office is open 9 a.m. to 4:30 p.m., Monday through Friday. Their phone number is 360-650-2865. An FAQ page has also been updated with answers to some of the more common questions that we are hearing from students.

Also, we have included directions at the end of this email for those of you who have yet to set up your refund choice online or for those of you who, for whatever reason, do not have access to your card.

We are committed to responding to students" concerns about the Choice Card. You are encouraged to send your thoughts and concerns to WWUChoicecardComments@wwu.edu. Additionally, in the next two weeks we will be establishing a task force, made up of students and university staff, to hear and address student issues regarding the Choice Card. The task force will hold forums to gather your input and report its recommendations by the end of the quarter. We will make you aware of these opportunities for input as they are scheduled.

We appreciate your patience and cooperation through this process, and look forward to working together to improve the refunding process.

Best,

Rich Van Den Hul
Vice President
Business and Financial Services

Anna Ellermeier
President, Associated Students

I replied with a complaint about having sent the letters to all students instead of only to students with refunds due and stated my opinion on the university being associated with deceptive advertising.

The email does answer one question, the university was in on it. The bank marketed the service to the school. And the school is getting some benefit somewhere, probably just by giving up some administrative costs which won't be visible to the students picking up the cost outside of their tuition. I'm disappointed the school is not acknowledging the deceptive aspect of the letters.

 

[tesscaline]

As for the 'purchasing power' of one's student ID, it would appear to be more of the deception by BankOne. (Or really Bancorp, because there are only a couple of companies behind all the cards: American Express, Bancorp, JP Morgan (Chase Card Services), Citibank, DiscoverCard. Did I miss any?). A debit card is a debit card. It has the "purchasing power" you put on the card or in the account. I would think students can use regular debit cards at all the school locations one could use the student card or cash or a regular credit card.

Some one is paying somewhere along the line or the card companies would not be marketing like this. There has to be profit in it. If the school administers the student ID card accounts, chances are they collect their costs out of the school's budget which comes from tuition and taxes. But those fees don't include profit. The bank has to be taking an additional profit somewhere. I doubt the additional deposits are the only benefit the banks are getting here. Certainly the amount of money deposited has the potential to be substantial, but credit cards are much more profitable than the passive benefit of deposits.

Sure, you can use a regular debit card. However, using the school's ID as a debit card gets encouraged by automatic "discounts" for students who use the card. It allows the card issuer to collect marketing data (have you ever read the agreements on those things? I have) about the student's purchasing habits, so the card issuer often offers the debit card services at a very low rate. It also saves the school money. Issuing paper checks, dealing with lost checks, typos on checks, keeping the staff on hand to deal with students signing up for EFT (and all the problems that come along with that), are all expensive things for a university. Not to mention the bank fees involved with all of the above.

Having a dedicated debit card program is actually a very cost effective way to go about things. Social Security has a dedicated debit card program for people who do not have bank accounts (or heck, if you do but just want the dedicated card anyway). State social services have dedicated debit card programs too. Food stamps aren't stamps anymore, they're a dedicated card. Using a debit card type situation for distribution of payments of any sort is a quick, easy, and cheap way for an organization to handle (by way of a third party contractor like US Bank) the regular and ongoing distribution of varying funding amounts.

 

[ehcks]

My college ID is used to buy from the college store from my Pell grant, and my refund is on a Mastercard debit card with the college logo.

That card is on a HigherOne account.

And this is all from St. Charles Community College.

Is this wrong?

 

[Roadtoad]

The best thing that can happen is what's happening now: SG is putting the word out about this scam. The more word out, the better.

It's too bad it's not on a blog; that would ruin MasterCard's day in a heartbeat.

 

[A Laughing Baby]

Here's more of the lie: Since when do college ID cards have purchasing power?

Without speaking to the rest of your concern, I used my ID as pretty much my sole purchasing card all through college. Usually you can allot money onto it, which can then be used at University-approved stores. It's one step above company scrip and a way for parents to control what their children spend money on.