Merrick Bank, South Jordan, UT, purchased the failed secured card transaction account debt from the FDIC in June 2002 of the former NextCard Bank, Phoenix, AZ. I had applied for a NextCard Visa account in February or March of 2001. The application was completed entirely on line and I was instantly approved. A few days after applying for the card, I received the NextCard in the mail. There was a sticker on the front of the card to call and activate, which I did.
After activation, I inquired on the available credit and found out that the card was actually a secured card and that until I made payments to a security fund, I would have no credit. Having read about secured cards in the past, and being in a rather poor credit position at the time, I thought that this would be a good way to rebuild my credit.
A few days after activation, I received an invoice in the mail from NextCard. The invoice had a balance due of 500.00 and a min payment of 25.00. I understood that they had placed the entire security deposit on the card and that as I made payment available credit would be granted to me for my use.
I sent in a 50.00 money order and after it had time to clear, called their 800 number and verified that I in fact had 50.00 credit available. The next month, I was about to send in another payment when I discovered that the balance on the next statement was accruing interest. I can see paying interest on a purchase, but not on money I was putting into a "secured" card.
At this point, I decided that I had made a mistake in opening this account. I called their 800 number and spoke to a representative. I explained that it was not my intention to pay interest on a security deposit. She said that she understood, many other customers had called about the same thing. I told her that I wanted to close the account and get my 50.00 refunded. She told me that the quickest way to close the account would be for her to mark in closed and that all I had to do was use the card to withdraw 50.00. I did as she instructed and made a transaction of 50.00 to close the account.
I never received any further communication from NextCard and felt that my request had been honored and the card account closed.
In January 2007, after going through a real tough time financially for the last several years, I decided to get a copy of my 3 credit reports to see what I needed to do to get my credit score back on track. It was at the point I received the reports that I found an entry from Merrick Bank. Since I had no knowledge of Merrick Bank, I filed a dispute with the 3 credit reporting agencies requesting the account to be removed. To my dismay, they all came back and said that Merrick Bank had verified the account. Not only did Merrick Bank verify, the high balance on the reports became an amount of 1082.00 with a charge off balance reported of 463.00.
I was furious with this, and looked up the number to Merrick Bank in UT. I called and was directed to the "special recovery" department. The person who answered the phone took my SS number and then began to ask me how I wished to take care of the outstanding debt. I stopped the representative and asked for proof of the debt. I was told that it was a NextCard account that they had taken over and that the debt was valid. I immediately told the representative that the amount was not valid. I tried to explain the situation with NextCard to the Merrick Bank representative, buy she cut me short and said, "nice try, it is far too late to dispute this debt". I was getting angry, and was bitting my tounge to not say something rude. Instead, I tried again to explain and she hung up the phone.
I then went on the Federal Trade Commission site to register an online dispute, hoping this would help to get the problem resolved. Instead, I received an email telling me that Merrick Bank was under the guidance of the FDIC. Or, that I should send a letter of dispute to the 3 credit reporting agencies.
I immediately typed up letters and mailed to the 3 credit reporting agencies. Once again, Merrick Bank verified the debt. Out of frustration, I contacted the FDIC through their on line complaint system. About 30 days later, I received a letter from them stating that the matter was a factual dispute and that they had no jurisdiction over the matter.
I started researching NextCard bank on the web and came across many complaints about questionable transactions and right along side of them was the name Merrick Bank. I also read a report that told me the key players at NextCard had been indicted on Federal charges for fraudulent reporting to the SEC and the FDIC on their assets.
I wrote a rebutal letter to the FDIC and asked for proof of the original debt from NextCard. In November of 2007, I received a letter from the FDIC with copies of credit card statements Merrick Bank suppossedly reprinted from the information given to them in the FDIC sale of NextCard secured cards to them. They only printed the October, November, and December 2001 NextCard statements.
However, it appeared to me that they had been altered as their was a line typed in the middle of the October statement that said "Security Card Account Balance $700.00" and in the middle of the November statement "Security Card Account Balance $0.00". The December statement showed that an amount of 463.00 in unpaid principal and interest had been charged off. The November statement showed that the security deposit of 700.00 had been applied to the 1082.00 principle balance and that the remaining principal and interest was outstanding.
Looking at these statements, provided to me by the FDIC in Merrick Banks' response to them made me sick to my stomach. It is clear that Merrick Bank either knows the NextCard accounts are fraudulent, or they have bought the failed assets in good faith and really think they are due the money.
I called the FDIC representative back again and explained everything that I had found out to her. My points are as follows: 1. The original payment was only 50.00. 2. The original statement was for 500.00 not 700.00 in security deposit. 3. I requested the account to be closed and never received any further statements. 4. The key players at NextCard had been indicted for fraudulent reporting to the SEC and FDIC. 5. Merrick Bank conveniently only reprinted the Oct, Nov, and Dec 2001 statements and not the April to September statements that would have shown no additional payments and no way for a balance of 1082.00 to be legitimate.
The representative told me to write up everything just like I did above and I resent it to the FDIC via fax. Today, Jan 4, 2008, I received a letter dated Dec 31, 2007 that my dispute is being reinvestigated. I am hopefull that this matter will be brought to light and that Merrick Bank will be forced to remove the account from their records. However, I can only imagine that their must be many others that had secured cards where NextCard or Merrick Bank has inflated the true value of the account.
I would like to see action taken against someone for failure to exercise due diligence in the sale and transfer of the failed assets of an institution that committed blatant commerical fraud.
The only credit reporting agency that has dropped Merrick Bank is TransUnion. I have tried again and again with Equifax (CSC) and Experian. Experian will drop the report in March 2008 due to age, but Equifax thinks the account is more current due to Merrick Banks erroneous reporting of dates and numbers.
I hope that if others are in the same situation that you will contact the FDIC at the following address: FDIC, Division of Supervision and Consumer Protection, 2345 Grand Blvd Ste 100, Kansas City, MO 64108. Maybe if enough of us are report this, they will have to recall the entire sale and make amends to each and every consumer that has been harmed by NextCard and Merrick Bank.
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