Old Jul 9, 17, 8:16 pm
  #214  
sdsearch
FlyerTalk Evangelist
 
Join Date: Jan 2005
Location: home = LAX
Posts: 23,525
Originally Posted by mikesyr18 View Post
Why would the bank interpret the CARD Act for more cards than they have to? It loses them money.
Certain banks do a lot of stupid things that end up costing them money.

They presumably do these things because they don't realize it's costing them money until long afterwards.

Perhaps one the prime examples is idiot bank Capital One which didn't look into how frequent flyer programs and their affiliated credit cards actually worked, and thought it had invented the best thing since slices bread and promised 100,000 bonus points for a "status match" promo if you send them a one-page statement from your airline program showing that you have 100,000 miles (or more) in your airline aco.... from your airline credit card. It was only after they started the promo that they realized that airline program account statement (that fit on one page especiallly) don't break down credit card spend miles earnings vs other earnings, and so they were forced to amend the promo to say you only needed 100,,000 miles or more in your account statement, period. Of course, that made anyone with that many miles in their account sign up for the card, get that (poorly named) "status match", spend the $1000 on some travel, and then cancel the card. They surely lost money on this, just because they structured the promo to appeal to the wrong people (of course, they wanted to appeal to the people who feel they can't ever book a flight with the miles they earned from their credit card, but most of those people don't necessarily have 100,000 miles or more, and meantime most people who do have learned how to actually use real airline miles.

Then there's Citi who didn't realize that for about a year that their own (not the customer's) conversion from an AA World MC to an AA World Elite MC was confusing their systems to create a "loophole" of their 18/24-month anti-churning rules. Obviously, they had to give you way more AA miles than they intended.

Then, "ripped from the headlines", it cost not just the bank but several of its top officials that they didn't realize how much money it would cost Wells Fargo to encourage sales practices which resulted in bogus accounts being set up without the customers' knowledge.

While none of these examples have anything to do with CARD act, of course, it illustrates that making money is not always evaluated correctly at banks. (And in two out of those three examples, of course, it was to FTers' benefit that the bank lost money in FTers' favor .)
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