Sunday, January 30, 2005

Life in Hell With Providian Bank

Beware of Providian Bank

Last September my credit card was stolen. A slew of unauthorized charges were made.

The card that was stolen was a “renewal” card that was sent by Providian to my home. Evidently, my existing Providian card was about to expire. Well – the renewal card never made it to me, but it did make to Wal-Mart, Kmart and a bunch of other places in very short order.

One day I get an automated call from Providian asking me to call them. I figured it was just the same old phone spam about wanting to sell me something I didn't want. In fact, my card had been suspended due to “suspicious” activity. I thought that was rather surprising considering that I kept the card in my file cabinet and hadn’t used it for upwards of a year. This is when I learned Providian had sent me a renewal card, but they also claim I had “activated” the card.

I believe what happened is that the same people who obtained the credit card also obtained the pin number that typically follows several days before or after the credit card itself. Hence, they activated it OR they had or have some other bits of my mail and managed to pass the security question (like enter your phone number, zip code, whatever).

Initially, Providian was amazingly helpful and I thought the matter was quickly resolved. They reversed the charges, I had to fill out some paperwork and I was relieved to have the matter over with.

It wasn’t over. And it isn’t over. And it isn’t going to be over for a long, long time.

Yesterday, I got a letter from Providian saying they had “performed an investigation” and are denying my claim – and reversed the fraudulent charges back on my statement i.e. they put the stolen credit-card charges BACK on the bill.

Needless to say I’ve been reading over the “arbitration” clauses that have become standard fare for most credit card agreements. So far, it doesn’t look good. Everything and anything is arbitrated, hence this enables companies like Providian to do whatever they want – including contracting out of all kinds of laws that were originally designed to protect people like you and me from fraud.

Going through with Arbitration is therefore – an option, but far from an ideal path. Naturally, I would like to have my day in court before an impartial judge and/or jury, instead of appearing at great expense before an entity chosen and hired by Providian.

Instead, I’m contemplating what I consider to be a potentially novel path, which is to sue the merchants that accepted the stolen credit card and attempt to recover monies from them. That won’t be easy. I’m not entirely clear yet what I could base my claim on i.e. legal theory, plus I can see some jurisdiction issues, and a bunch of other stuff to mull over when it comes to going down this path. The upside is that I don’t have arbitration issues. I don’t have ANY agreements with Wal-Mart, Kmart, etc. Did they follow proper procedures to verify the identity of the person using the card? Was the merchant negligent? Did the merchant exercise reasonable care in verifying the transaction? You get the picture.

Just as I get sick of law school - this crap happens and I get reminded as to why it's important that I keep going forward - because Fighting Evil is hard work.


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