Direct Merchants Bank •Application Fees •Change of Address Policy •Collection Policies •Customer Service •"Credit Protection" •Interest Rates •Late Fees • Late Posting of Payments •Over-Limit Fees •Preying on the Disabled • "Rate Reward" •Secured Credit Cards •Security Policies •Disappearing Funds •Telemarketers •An Insider's View

Here in the vault, we have our "classic" Direct Merchants Bank complaints -- the ones that have been on our site for the last several months. Click here for more recent complaints, sorted by subject matter.

Andrea of Gorham, ME, writes:

I have had such unbelievable trouble with Direct Merchants Bank.  They are either unable or unwilling to work with their customers in regards to paying off their credit cards.  

I was given a card with a limit higher than others that I already hold.  I was concerned by the higher interest rate being charged, but assumed that it wouldn't be a problem.  I couldn't have been more wrong.  

Once I reached close to my limit, suddenly my payments were "mysteriously" late.  Consistently.  One of my payments took almost two and a half weeks to appear on my account.  This of course incurred late fees which of course pushed me over my limit causing additional fees.  This has spiralled out of control.  

Once they began calling to get me caught up, I was enrolled in a plan that would have brought my account current, but still over the limit.  I met the criteria and stipulations of the program, and after three months of consecutively making payments before they were due, suddenly I was being told that I was never part of the program.  

Each time I had contact with Direct Merchants Bank, I had the program explained differently.  Each time, the plan sounded less and less like something that would help me.  I have not charged on the card in almost two years and in that time have been charged more than $1,000 in finance charges, late fees and over the limit fees.  

Besides the fact that no one seems to know where my account is (customer service or collections), no one can give me a straight answer as to whom I can speak with to help me get back on track.  They have become extremely persistent in contacting me and have been known to call the house daily (sometimes multiple times in one day if the answering machine picks up - they don't leave a message, they just hang up and redial).  

I enlisted the aid of a financial consultant to help me, and they still continue to contact me even though they have been told verbally and in writing that all contact should go through him.  He sent through a proposal, which of course was denied, and never had the courtesy to contact either one of us with notification of denial.  I have found almost all of the persons that I have spoken with to be rude, condescending and totally without remorse.  I was actually told once that no one there would help me because a company of that size didn't need to make any kind of concession for any one customer.  I guess they are just too big to care.

I have begun fearing that my phone would ring because I knew it would be them.  They call almost everyday, and even up until 9pm on Sundays.  I have been treated rudely and with thinly veiled contempt.  I have made efforts to make larger payments than what they were asking for, but still nothing has helped my balance.  It is ever increasing. 

Angela of Los Angeles writes:

In early March 1999, I was solicited by Direct Merchants Bank to apply for a secured Mastercard ($500 limit/$99 security deposit). I sent a postal money order accepting the offer on 3/22/99.

The second week of April I rec'd a letter from Direct Merchants confirming my enrollment in an "Account Protection Program". The letter was addressed to me with the wrong address and the postal person wrote my correct address on the envelope.

I immediately telephoned Direct Merchants and advised them that I had rec'd their correspondence regarding this program, but not a credit card. I then completed a telephone report regarding non-reciept of the credit card and was advised that card with a new account number would be re-issued in about 7 days.

I also informed the representative that I did not want to participate in the "Account Protection Program".

On June 23, 1999, I telephoned Direct Merchants Bank and advised them that I had not yet rec'd my credit card or return of my deposit. I was transferred to 5 different departments and finally advised that a credit card would be sent to me in 7 to 10 working days. After reading all of the complaints from Consumer Affairs.Com, I have decided that I do not want to have a relationship with this institution.

As of today's date, July 17, 1999 I have not received any correspondance regarding the status of my deposit or credit card. I telephoned Direct Merchants on July 17, 1999 and advised them to return my deposit. I was advised that the account was closed and that my funds would be returned to me in three weeks.

Although, $99 is not a lot of money, Direct Merchants has held my money for approximately 4 months. This institution seems to be extremely unorganized and based on the numerous complaints should be the subject of investigation by a federal regulatory agency. Thank you Consumer Affairs.Com for making me aware of the problems with Direct Merchants Bank. I will be keeping an eye on my credit report to make sure that this institution does not report erroneous information.

Kimberly of Wyoming writes:

In March of 1999 I was solicited for a credit card with a limit of $500 if I sent $99 as a security deposit. This solicitation came from Direct Merchants Bank stating that the Fingerhut National Bank recommended me to them.

In April of 1999 I sent the $99 fee and they deposited my check. I haven't heard from them since (as of 7/26). No credit card, no refund...nothing. I still have the check but no way to contact Direct Merchants Bank. I have no address for them, no phone number nor a name.

I couldn't really afford the $99.00 that I sent to them, but I believed that this would be a good way for me to re-establish credit.

J.F. of Davis, CA, writes:
Direct Merchants bought credit card accounts from PNC Bank and then unilaterally raised the annual interest rate on them from about 14.9% to 20.8%.

In the past when debt accounts of mine have been sold to a new "holder in due course," the terms and conditions of the old account always carried over to the new one. 

On what legal basis is Direct Merchant able unilaterally to impose this new higher rate? I certainly haven't done anything that I would deem to be an "agreement" to their new rate. Applicable state law for Direct Merchants is evidently that of Arizona (possibly Oklahoma). Do either of these states have laws that permit this sort of unilateral "bump-up" of interest rates? What is the applicable Federal law on this aspect of interstate commerce. How am I, a resident of another state, subject to Arizona law? Can Direct Merchants be compelled to honor the interest rate I agreed to with PNC bank?

I will have to pay hundreds -- possibly thousands -- of dollars in additional interest on terms to which I never agreed. I also had to endure conversations with ignorant and arrogant functionaries of Direct Merchants bank. They don't respond to correspondence. I am demeaned, insulted, and trifled with.

Sherri of Columbia, MO, writes:
I received a Direct Merchants Credit Card in April 1999. I have received only 2 statements, and have sent my payment in plenty of time. Yet, I keep getting these late fees added to my account. When I try to call and talk to someone I get the recorded message, "If you want to know account balance and infor press 1.....", then it says if you want to speak to a representative press 9 I think. Well if you do that, you then get a recording that the Metris number you have dialed is not in service, UGH!! I have never spoken to a real person there, are there any? I am getting burnt, and I know it. When I read these other stories, it really scares me. I am trying to repare credit, not make it worse.

I'm worried. My stomach hurts from this. I'm so afraid my credit is just going to be made worse. This is not my fault, what will I do?

G.G. of Iowa City, IA, writes:

I accepted the unsolicited offer to use a Direct Merchants Bank credit Card in November 1996. Autovantage charges were added automatically to the card but I opted not to use the service, a chocie that was clearly allowed when I accepted the offer to use the card. I phoned customer service and requested to have the amount removed from my account. The charge continued to be on my acoount and late fees were added, despite the fact that I was told several times that the charges would be removed. This continued through March, April and May 1997.

In a final phone conversation I was told that the charge had been removed and that the balance on my account was $ 0.00. I closed the account. I did not hear from Direct Merchants Bank again and never received another statement.

In April 1999, I was notified by Coldata, Inc. that Direct Merchants Bannk had put the original $ 49 Autovantage charge plus $154.31 into collection and that I was to pay immediately.

Since then, I have spoken to several customer service representatives who could not do anything about it. I was referred to supervisor M.K. who seemed helpful and immediately admitted that Direct Merchants Bank had made a mistake and that he would take care of it. But so far, he did not resolve the problem, has never returned calls that he said he would and told me finally, that he could not do anything

I also wrote two letters to the President of the Bank, Doug McCoy, but have not received a response.

My credit history has been fraudulently smeared by Direct Merchants Bank's mistake. I have spent hours on the telephone and suffered much personal anguish. At the moment, I am liable for $ 203.31 which I will not pay. Direct Merchants Bank should pay this and punitive damages to be determined.

RMK of Coos Bay, OR, writes:
I made a $6,000 payment and decided to keep a $387 balance. Because I didn't pay the balance in full they are charging $72.00 on the $6,387.00.  How can they charge interest on $6,000 I paid.

My husband passed away January 1, 1999 and I wanted to pay this bill from his estate.  I am 68 years old and think I am being taken advantage of. Why do I have to pay interest on money I paid.

L.P. of Camp Springs MD writes:

I had requested in writing several times to close my account with Direct Merchants. I have not used the card in over a year. I made my payments on time every month of $63.

In October 1998, I received a bill that was increased about $15 for no reason and no notification. I made my next payment of $63 as usual. Then I get a notice in the mail telling me that I am delinquent because I didn't pay the late fee. I told them that I had requested that the account be closed, plus I hadn't used the card in over a year and had made the payments on time every month.

They told me that the increase was approved by the federal government and also the increase was to cover the finance charges. I told them that I didn't know anything about that law and I refused to pay the late charge. In January I made the usual payment. They did close the account, but now I am being called on my job and at home every day.

Today (February 17, 1999), I made a payment of $112.00 to Direct Merchants. This is not fair. They are cheating the consumer. I believe its because I was not using the card and requested that the account be closed. I want to write a letter to the president (Ron Zeibeck), but what good would it do?

I am going to pay the credit card off, but in the meantime do I have to pay the increase that they made up? I also told them that I could not afford their increase on one of the many harrassment calls. They have called me on Sunday, Monday, Tuesday, Wednesday, etc. My account is not 30 days delinquent. The payments are made every month. What is their problem? Please help me. I know other people are going through similar situations with Direct Merchant.

The emotional damage is the stress and embarrassment, especially on my job. On Sunday (Feb. 14) I had just come home from church and I get a call telling me that my account is delinquent and I owe $112.00. I just made a payment in January of $63.00. How can I owe $112.00 when I'm making payments every month?

J.J. of Waldorf, MD, writes:
I have been paying on a Direct Merchants account for the past 4 years. My high balance was $850. After a year I lost my job and had some financial troubles which caused me to get behind on all bills but I got another job and immediately caught up and have paid my bills promptly since then.

Yesterday I received my Direct Merchant's bill and noticed my interest rates were 26.7%. I had not been notified of this rate increase and I don't understand why after 3 years of good payment history I would suddenly be zapped with a higher interest rate and without notice. Please note that I have been sending in double payments to pay this account off. Did Direct Merchant's act legally?

S.M., Oviedo, FL:

I had a PNC Bank Maatercard with an 12.5% interest rate. I had never missed or been late on a payment. After Metris Companies, Inc. acquired PNC Bank's credit card portfolio, I was involuntarily issued a Direct Merchants Bank credit card (approx March, 1999). Without any warning the rate was increased to 20%! This despite ZERO late payments with PNC bank or any other creditor.  My telephone call confirmed that this rate increase was not a mistake.

Since the rate increase, I have subsequently paid off the balance. When telephoning to close the account, I was told by a representative that I now could get a special rate of "12.5%". (My original rate with PNC Bank). I told the representative that I would never do business with their unscrupulous, greedy corporation.

N.J. of Brooklyn writes:
I have a mastercard which I received from Fingerhut through Direct Merchants Bank. Last September (1998), a charge of $3350 appeared on my statement and I started enquiries with them to get the matter resolved. They informed me that a “convenience” check, drawn on my account, had been used for that amount. I disputed the charge and they agreed to get a copy of the check and mail it to me so I could verify the signature. Despite the fact that they have my signature on file and also on the checks which I have been paying my account every month, I agreed to wait until I received the check.

When I received it 3 months later, I immediately made copies of various identification cards I own to show proof that the signature on the check in no way resembled my signature; the  credit card, my library card, job ID. This was in December. The charges have appeared again on my January statement, including finance charges.

A week ago I received a call from the bank wanting to ‘remind’ me that I had not made a payment on that statement. I told the teller that I will not pay any more money on that  account until it has been adjusted to reflect my actual charges. She informed me that she cannot do anything for me. A few days later I received another call and had almost the same conversation. I requested that my account be noted that I am waiting for an adjustment and that I do not want anyone calling my home again. I was told that unless I  make a payment someone will call me every few days. I do not understand why I should have to put up with this harrassment.

Isabel of Rockville, MD:

About 4 years ago I got a credit card from Fingerhut (Merchants Bank issued it). I charged about $495   and they charged me a bogus $29 late fee which took my account over the $500 credit limit.

For 5 years this bank has been charging me a $29 over the limit, plus 18% interest and $29 late fee. I have been making payments to this bank for 5 years and I now owe them over $700. How can you charge over the limit charges every month for your own charges.

I'm totally stressed out, I can't miss a payment because they will report me to the credit bureau and I'm looking to purchase a home within the next couple of years and if this continues I will owe them a fortune for nothing.

Deborah of Brandywine, MD, writes:

I realized that I had not mailed my monthly payment to Direct Merchants Bank (for a Fingerhut Master Card), and that it was due the next day. 

I contacted the customer service number and was told they could take the payment over the phone if I provided them with a check number, which I did. I authorized a payment of $100 plus the $4 service charge. I went to an ATM machine to withdraw money a few days later and got an "insufficient funds" notice. Knowing something was wrong I did an inventory through my bank's phone service and found out that the check which was supposed to be for $104 was actually processed as $1,004. 

Of course, this has caused numerous checks to bounce in my account.

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