Connecticut Attorney General's Office
Attorney General Pleased Kardashians Seek To Sever Ties With Predatory Prepaid Debit Card
November 29, 2010
Attorney General Richard Blumenthal announced today legal counsel for the Kardashians have notified his office that they are seeking to immediately end their association with the Kardashian Kard prepaid debit card.
This action follows Blumenthal’s announcement Friday that he is investigating the Kardashian Kard because of its predatory fees combined with its appeal to financially unsophisticated young adults.
Blumenthal is pleased the Kardashian family recognizes his concerns, but his office will monitor whether University National Bank and MasterCard ultimately eliminate this card.
“I am cautiously pleased that the Kardashians are terminating ties to the Kardashian Kard -- a prepaid debit card loaded with predatory fees,” Blumenthal said.
“A larger lesson -- common to other prepaid debit cards -- is that targeting young adults with predatory card terms and conditions may bear close scrutiny and caution.
“Keeping up with the Kardashians is impossible with this card, where consumers lose money before they use money. Even before consumers spend a dime, the Kardashian Kard fees swallow the card’s value.
“The card is filled with gotcha fees and charges, such as $99.95 annual fees, $7.95 monthly fees (after the first year), ATM withdrawal fees, bill pay fees, loading fees -- and even charges for talking to a live operator at their service center, and a card cancellation fee.
“The Kardashians perhaps recognize that fans will be fuming over these money-eating cards. My office remains concerned until University National Bank and MasterCard officially agree to stop selling these cards -- with or without the Kardashian name.”
The Kardashians and their company, Dash Dolls, had an agreement with The Revenue Resource Group, LLC (RRG) granting a limited license to use the names, photographs, likenesses and endorsements of Kim, Khloe and Kourtney Kardashian in connection with “the marketing and sale of MasterCard prepaid debit cards in the name of the Kardashians.”
In a letter to RRG and University National Bank, legal counsel for Dash Dolls announced it “hereby terminates the Agreement in its entirety, effective immediately.
The notice cites Blumenthal’s concerns about the card, including questions raised about whether it conflicts with Connecticut’s gift card law and other consumer protection laws.
In a letter to University National Bank Friday, Blumenthal demanded specific details about the card terms, fees and how it’s promoted and sold in Connecticut.
Blumenthal said the “prepaid debit cards” resemble gift cards under Connecticut law and could be subject to the state gift card law, designed to protect consumers from pernicious and predatory fees that can unconscionably drain value.