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Low Pay, Inc. Charged with Deceptive Marketing

How can a company find customers willing to pay almost $400 in fees for a credit card that will only finance 30% of purchases from a single catalog? It's hard to imagine, but the FTC seems to have caught one dead in its tracks.

According to a press release issued on November 3rd, a formal complaint was issued in federal court alleging that Low Pay, Inc. used deceptive mailers to market its card to consumers with credit problems, charging them hundreds of dollars in up-front fees and often reneging on its refund policy. In response, Low Pay has apparently agreed to pull the plug on its questionable practices while they battle it out with the FTC.

The actual complaint explains in more detail how the FTC believes Low Pay pulled this whole thing off. Here's what was allegedly going down:

The Hook - Mailers were sent to consumers with a poor credit history stating the "Pre-Approved" Platinum card would help them build credit

The Line - The card was marketed as a normal credit card with a "Guaranteed" credit line of $7,500 and cash advance benefits

The Sinker - It wasn't a normal credit card at all. In fact, customers could only use the card to finance 30% of the purchase price for products from Low Pay's overpriced catalog, while up-front fees would total as much as $397 and payment histories were never reported to any of the credit bureaus.

These are all alleged complaints from the FTC; however, they still stand as an excellent reminder for consumers to be keenly aware that these types of scams are abundant in the financial world today. If you're interested in a credit card offer of any kind, it never hurts to take a few minutes to research the product online and visit our discussion forum about credit for advice from fellow consumers.

The extra effort could not only save you a lot money, but also a big headache down the road.

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Joshua Heckathorn's picture

Joshua Heckathorn was President of Creditnet, is a credit expert and has been featured on CNNMoney, FOX Business, Yahoo Finance, The Street, and many other national publications during the past ten years.  He received a Bachelor of Science in Management (Finance) from Brigham Young University's Marriott School of Business and earned his MBA from Seattle University.

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Bill Airy at BoostMyScore.NET's picture

I remember seeing this advertisement on MyFICO.com about a week ago! Looks like one scammer is banking off another! There is nothing worse than felonious liars trying to pretend they have something a hard working American needs (i.e. credit cards with a guaranteed limit, “real” credit scores, etc), then charging them for it and not delivering. Otherwise known as: thieves. How do these people sleep at night!