Credit Card Chat

I'm sorry to hear about your disability. Your case sounds pretty clear-cut but there are some points to consider.

I should say up front that while I researched this story pretty thoroughly, I don't have any direct experience dealing with the claims departments of these companies. That said, I'm very interested in how this turns out for you and would love to share the outcome with my readers.

Appealing a Credit Protection Claim Denial

If they deny your claim, don't take it lying down. Find out exactly why they can't approve your claim and do what you can to remedy it. Try to work with them to reverse their decision. Talk to as many people as you can (like this guy did).

It's difficult to sue them for a couple of reasons:

1. You can't take them to court (at first). Your Citibank cardmember agreement says that legal disputes must be handled through arbitration first.
2. Finding a lawyer will be tough. The most you can get from this claim is $10,000. Even if Citi handed you a check at the end of a successful lawsuit (they won't, they'll just forgive your credit card balance), that leaves very little for the lawyer on a 30% contingency.

Of course, we're assuming the worst here. Call them up and see what they do with your claim. If you have strong evidence and documentation showing that you qualify, they should come through for you.

What Could Go Wrong with Your Credit Protector Claim?

An approved SSDI or SSI claim is pretty ironclad proof of your disability. But you're dealing with a company operates like an insurance company. Worse yet, they are not regulated like an insurance company.

Keep these points in mind when approaching Citi with your claim:

• Did your disability occur before you signed up for Citibank Credit Protector?

  Payment protection doesn't cover "pre-existing conditions." You will need to prove your disability occurred after you signed up for payment protection. If you don't provide evidence of your condition (medical records, etc.), they will deny your claim.

   

• Is your account current?

  You could run into trouble if you are behind on your payments. I don't have the fine print for Citibank Credit Protector but all credit protection plans will suspend your participation in the program at some point if you are delinquent in making your monthly payments. It may be as little as 30 days, it could as long as 90.

   

• You may have to take deferment before they forgive your debt.

  There's a curious phrase in the terms and conditions summary for Citicard Credit Protector in regards to qualifying for long-term disability:

  ...you must have qualified for 24 consecutive months of Credit Protector short-term disability benefits.

  This could mean one of two things:

  1. You must have been disabled for 24 months under their definition for short-term disability benefits to qualify for the long-term disability benefit.

      

  2. You need to exhaust your short-term disability benefit before you can use the long-term disability benefit.

  If it's #2, you'll need to let your credit card debt sit on your account for two years before they will write it off. You won't have to make payments during those two years, though it will affect your credit score.

   

• Can you work at all?

  They might be able to stick you this way: They need to be convinced that you can't find work in a different field. Again, from the terms and conditions summary:

  ...not able to perform the duties of any occupation... (emphasis added)

  If you can flip burgers, do data entry, take money at a toll booth or work any other job despite your condition, they have grounds to deny your claim.

Hopefully I've helped prepare you for that call to Citibank. Let me know if you have any other questions or concerns.

Please check in with your progress. I'm eager to hear more.

Unfortunately, I don't have access their customer agreement, not even the current one. You may be able to appeal their decision, though, even if the 180-day clause was in the original contract you signed.

Try Getting Citi to Change Their Minds

Payment protection administrators do have the authority to grant you an exclusion to the 180-day provision. You should certainly make that request.

Here's the case you can make:

• You would have otherwise qualified for unemployment benefits
• You paid for the plan faithfully for 5+ years
• You are not asking for retroactive benefits, only to start covering your payment until you get a new job or for the remainder of the benefit period (6 or 18 months depending on which CitiCard protection plan you have).
• The six-month window in which to file a claim apparently wasn't part of the original agreement.

If they have any compassion for your situation and consideration for the fact that you've been covering your own payment all this time, they will grant you an exclusion.

Legal Contract Hidden from Public

The terms and conditions are extremely difficult to come by. You actually have to sign up for the program before you get the fine print. That's how I obtained the agreements you see on Knowzy: I actually signed up for each one of them and posted them as a public service.

It's unconscionable, in my opinion, that they expect you to enter into a legally binding agreement without the ability to find out what you're agreeing to.

I'm impressed your senator got you a copy.  That's very commendable.

Since you got action through that route before, I would pursue it further if your appeal to Citi fails. This time, be very specific with what you're looking for:

• The customer agreement from when you signed up
• The customer agreement from when you became unemployed
• The date they changed their terms (assuming the rep you spoke with is correct).

If this were actually an insurance plan, you could write to your state Insurance Commissioner. Since it isn't, you are more or less on your own in dealing with this company.

Hard Lesson Learned

Yours is another glaring example of why credit card payment protection is such a bad idea: You spend thousands of dollars for peace of mind only to have the company use a technicality to deny you the benefits you paid for in your time of need. Had you put those thousands of dollars toward paying down your credit card debt instead, you might have been close to paying it off by now.

I'm sorry you had to learn the hard way.

Many thanks Dirigible! First Premier offered this card at http://www.aventium.com before the Credit CARD Act took effect on February 22^nd. In fact, they changed the URLs on all three of the fee harvester cards they offer.

Thanks to your tip, I now have all three cards back in the comparison charts.

Sales Calls and Text Message Spam

I've read the bit about giving out your cell phone number willy-nilly if it ever shows up on their caller ID. This provision includes text message advertising in addition to telemarketing calls.

I called their customer service department to ask about this policy. The woman I talked to wasn't familiar with the mobile phone policy in particular but assured me that the don't hand out your personal info until you become a customer.

That wasn't good enough for me, so I had her talk to her supervisor about it. Her supervisor agreed that your number isn't fair game until you sign up for the card.

Do I believe them? Not really. Why? This is what it says in their credit card application:

Your Consent For Calls And/Or Text Messages To Your Cellular Phone: If we collect your cellular phone number from you, from another source or as a result of receiving a cellular phone call from you, you expressly consent to accept from us, our affiliates or any third party acting on our behalf:

(1) Calls or text messages for collection purposes or for other account-related purposes, such as to process your application.

(2) Calls or text messages that we initiate to your cellular phone number made or transmitted using any automatic telephone dialing system and/or containing prerecorded messages.

You agree you will be responsible for any fees or charges you incur as a result of incoming calls or text messages from us, from our affiliates, or from any third party acting on behalf of us or our affiliates.

Notice it says that merely calling them implies your consent to be on their marketing list. There's no stipulation that you need to be a customer.

Regardless of whether you are their customer, slamming your phone with pre-recorded messages and text messages shows just how little respect they have for you and the federal law that ordinarily prevents this type of cell phone telemarketing.

You would continue to pay off the balance under the same terms. With your interest rate tied to prime rate, it will continue fluctuating with the prime rate. They can increase your minimum monthly payment, however, if you opt out of a rate increase and elect to close your account.

The credit card company can require you to pay off the balance in five years, which increases your minimum monthly payment accordingly.

The new law also allows banks to double your monthly payment if the five-year plan doesn't raise your payment enough to make them happy.

The Credit CARD Act of 2009 scored a big victory for consumers: Credit card companies can no longer change the interest rate on existing balances. When you make the purchase, you pay the same interest rate until you pay off the charge.

The feds may have taken the interest rate lever away from the credit card companies but they can still use the minimum payment to dissuade you from cutting them out of your life.