Complaint Review: US Bank

Several years ago I, a resident of the State of Nevada, opened a checking account with USBank at a branch located in Las Vegas, Nevada.

At that time I was told that to avoid monthly service fees I should open a savings account as well and agree to automatic transfers of $25 per month.

When the savings account balance reached $1,000 I would receive a prepaid debit card with a value of $50 and after maintaining that balance for one year I would receive another $50 prepaid debit card.

usbank.com/start/start.html

"Save $1,000, get $50. When you save $1,000, we'll recognize your achievement with a $50 U.S. Bank Rewards Visa® Card."

One year ago I received my first prepaid debit card but I had few chances to use it since my job has kept me in Costa Rica for quite some time but this card is valid for two years according to the printed expiration date.

Recently I received my second card for $50 and during my recent trip to Las Vegas I decided to try to use these cards.

When I visited the website myusbankcorporaterewards.com I discovered that the bank had deducted $5 from my first card as "administrative fees" of $2.50 per month for two months.

I guess I had been too busy with my work to read the fine print, but after talking with the manager at the bank and researching the above website I have concluded that despite the clever efforts of USBank to "comply" with the law it has actually violated the law.

The main reason for this claim is that US Bank issued to me a 1099-INT for $50 in Tax Year 2013, thus characterizing this pre-paid debit card as an instrument of payment for accrued interest and not a new contractual agreement.

Other relevant facts include:

1. The terms of the debit card were not disclosed to me prior to receiving this card.

2. The "fine print" insert seeks to establish the State of Ohio as the jurisdiction for this contract and I am a Nevada resident doing business with a bank licensed in the State of Nevada.

3. The back of the card reads "Use of this card by you will be your acceptance of the terms of the cardholder agreement and program materials." Thus the bank acknowledges that I have not previously agreed to any terms.

4. US Bank describes this card as a "Rewards Card" as though it is some type of gift but as mentioned above due to the issuance of a 1099-INT this is an instrument of payment for the bank's debt obligation to me for interest accrued.

5. Both Nevada law and Ohio law pertaining to gift cards specifically state:

6. Here's a great place to get more information about the Form 1099

leg.state.nv.us/NRS/NRS-598.html

NRS 598.0921 (3)a

"...The term does not include:

(2) An instrument or record, by whatever name called, that may be used to obtain goods or services from more than one person or business entity, if the expiration date is printed plainly and conspicuously on the front or back of the instrument or record."

http://codes.ohio.gov/orc/1349.61

1349.61(c)

"Division (A) of this section does not apply to any of the following gift cards:
(6) A gift card that is usable with multiple, unaffiliated sellers of goods or services;"

This clearly is not a gift card.

This is a prepaid debit card which the bank purchased for me as a means of payment of accrued interest which I had earned by lending them my money for a specified period of time.

The manager at the bank told me that she had no means my which to credit the $5 since this card was issued by the credit card division and the only way for me to discuss this matter with the credit card division is to call the number on the back of the card and to agree to a deduction of $1 from the balance of my card just for the opportunity to talk with someone.

Summary:

The appropriate analogy for this case is that of the bank issuing me a check as payment for accrued interest with a stated "valid through" date and then prior to that date placing a stop payment on that check and issuing me a new check for a reduced amount and when I complain they simply point to the fine print on the unused check which states "by using this check you agree to all terms..." but of course I have not used the check and thus have not agreed to any terms.

The original contract was for me to deposit $1,000 into a savings account for a specified period of time and to receive $50 in interest in the form of a prepaid debit card and when I received the anticipated payment instrument from the bank it came with a new proposed contract for acceptance of this payment.

I have not accepted the terms of this contract and yet they proceed to enforce the terms as though this new contract actually had been engaged.

USBank has been offering this promotion for several years at least and I am sure that there are many thousands of accounts to which this type of event has occurred.

I know it's only $5 but someone has to take a stand against this type of business practice.