The method of consumer deception referred to as the “bait and switch” describes fraudulent luring by advertising a product or service through price or other in-demand features that is not available or changes in the end (Arens, W.F., Schaefer, D. H., & Weigold, M. 2009). An example I located encompasses Chase National Bank’s promotional offer for a “lower than prime” balance transfer rate for customers currently holding high interest debt. The solicitation promised: “No tricks, no gimmicks…just savings”. Chase’s offer was pretty strait forward, an awesome low APR (annual interest rate) with a minimal percentage transfer fee until balances are paid off, as long as required payments were made “on time” (Weisbaum, H., 2009).
The bait and switch tactic occurred after signing, with the receipt of the first bill that reflected a monthly fee of $10 added to cardholder accounts. This $10 a month fee significantly raised the interest rate on these balance transfer accounts and caused over-the-credit limit default for many. Upon contacting the customer service department, the representatives offered to drop the monthly maintenance fee if customers agreed to a new and much higher APR (Weisbaum, H., 2009). As a close friend of one of the banks’ transfer credit card holder, this type of activity was viewed as not only illegal, but with the abusive overtones of strait-out blackmail! Since legal intervention, stories have evolved that Chase erased the “fine print” and replaced it with new terms that gouged customers and served advantageous for the company. New rules from the Federal Reserves’ Credit Cardholders Bill of Rights, prohibits credit card companies from changing terms regardless of reason. President Obama signed the legislation on May 22, 2009, making it part of the Truth in Lending Act (Weisbaum, H., 2009).
References:
Arens, W.F., Schaefer, D. H., & Weigold, M. (2009). Commercial Break. Essentials of Contemporary Advertising. (2nd ed.). Boston: McGraw-Hill Irwin. ISBN: 978-0-07-338097.
Weisbaum, H. (2009, May 6). Customers sue Chase for changing terms. Consumer Man, MSNBC Contributor. Retrieved on September 28th, 2010 from http://www.kval.com/news/consumertips/44418137.html
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