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Credit card holders are out thousands of dollars after a deal between company, bank goes bad
Customers who signed up for a Plastk secure credit card tell CBC Go Public they’re out thousands of dollars after not getting their security deposits back, something the business owner blames on the bank he partnered with.
Constance McCall can’t catch a break.
The Edmonton woman needed to fix her credit score after getting divorced, so she signed up for a secured credit card that promised to help her do that.
Instead, she was out thousands of dollars, and left with a credit score that’s worse than when she started.
McCall, 59, is one of many cardholders stuck in the middle of a bitter legal battle between the credit card company and the bank it partnered with, Calgary-based Digital Commerce Bank, also called DC Bank.
She signed up for the Visa through Plastk Financial & Rewards after seeing it recommended on Credit Karma, a website she trusted.
Plastk promises cardholders the chance to improve their credit scores by reporting their transactions to the credit bureau Equifax.
As a secured card, the credit limit matches whatever customers prepay for a security deposit — between $300 and $10,000.
Plastk says customers can cancel any time and get their deposit back after a two-month holding period if the account is in good standing.
But dozens of customers CBC’s Go Public spoke to, and hundreds more who have complained online, say Plastk isn’t giving their deposits back.
After cancelling in December, McCall was expecting $4,500 to be returned in February. Without it, she’s had to borrow from family and friends to pay for the basics.
It took four months for McCall to get her refund back, and only after Go Public brought the case to the company’s attention.
Plastk CEO and founder Motola Omobamiduro says he is trying to pay customers back, but their money is being held up by DC Bank.
Plastk and DC Bank partnered in April 2020. Court documents show their dispute started about two years later when DC Bank said Plastk owed unpaid fees and wasn’t providing the required funds for the bank to pay Visa.
Plastk said the bank was unfairly imposing new rules and fees and that its technology didn’t always work — limiting Plastk’s ability to do business. Read more
Retail sales suggest we aren’t ready to quit shopping, despite high prices and dire warnings about debt
Canadians are on a spending spree.
Statistics Canada reported that retailers took in $65.9 billion in April. That’s an increase of 1.1 per cent from March’s level.
Just about every type of store booked higher sales during the month, with the exception of furniture, electronics and appliances retailers, where sales shrank by 1.6 per cent from March’s level.
Core retail sales, which strip out volatile items like gas, cars and car parts, actually increased by even more: 1.5 per cent.
That metric has now increased for five months in a row, even as calls for consumers to tighten their belts have grown. Sales increased in eight of 10 provinces, led by New Brunswick where they were up by 4.4 per cent. The two exceptions were Prince Edward Island and Newfoundland and Labrador.
A large part of the spending spree can be chalked up to inflation, as higher prices mean people pay more for the same amount of products and services — which will boost a retailer’s take.
But sales also increased in volume terms, too, rising by 0.3 per cent during the month.
The sales surge was more than twice as strong as what economists were expecting, and early Statistics Canada numbers for May show that month is on track for another gain, of 0.5 per cent. That puts it on track to beat the all-time monthly high of $66.3 billion clocked in June of 2022.
Shelley Kaushik, an economist with BMO, says the numbers show that consumer spending is proving to be “resilient” in the face of growing pressure. “Looking ahead, momentum in consumer spending is expected to slow in the second half of the year, as yet higher interest rates and still-elevated inflation continue to weigh on purchasing power.” Read more
WestJet says swallowing Sunwing, Swoop is a win for travellers — but not everyone has high hopes
WestJet’s takeover and consolidation of discount airlines Swoop and Sunwing into its main carrier has some vacationers and travel experts worried about higher prices to come. But the CEO of the Calgary-based airline says the moves are a win for everyone.
In case you missed it, WestJet Airlines Ltd. announced plans to fold recently acquired Sunwing Airlines as a standalone entity and merge it into its eponymous carrier. That move came only days after it announced similar plans for Swoop, the discount airline it launched itself in 2017. The federal government approved the takeover of Sunwing in March.
The merger means two fewer discount airlines serving travellers in Canada — raising concerns from critics that there will be less competition in the industry and higher prices.
“It’s not good news for Canadian consumers overall, it never has been,” said Anshul Singh, founder of travel and loyalty-program website Points, Miles and Bling. “Any time we see lowered competition, we should really expect prices to go up over a period of time.”
Singh said WestJet may be trumpeting the moves as a win for everyone and told regulators what they needed to hear to sign off on the pact. But ultimately, he said, the moves to fold in Swoop and Sunwing are designed to maximize their profitability.
For its part, WestJet says that consumers should indeed expect to see the same type of cheap seats they saw before, except now they’ll be on a WestJet-branded plane. Read more
SmileDirectClub must release over 17,000 consumers from non-disclosure agreements
A settlement has been reached between Washington, D.C.’s Office of the Attorney General and SmileDirectClub, a direct-to-consumer orthodontics company.
In 2022, the attorney general sued SmileDirectClub for unfair and deceptive practices, alleging that the company unlawfully used non-disclosure agreements (NDAs) to silence consumers, manipulate online reviews, and hide information about the safety and effectiveness of its products from the public and from government regulators.
SmileDirectClub denied the allegations, and in a settlement agreed to notify consumers who previously signed NDAs that they are now free to speak about their experiences, to stop requiring consumers to sign agreements that prevent the sharing of information before providing refunds, and to pay $500,000 US to the District of Columbia.
Marketplace has previously investigated SmileDirectClub and found the company was sharing misleading and potentially harmful information and questionable treatment plans.
SmileDirectClub’s website promises straighter teeth in as little as four to six months. Users get multiple plastic aligners at once in the mail and change them every week or two, according to a schedule. The company also says that the aligners come at a lower price tag, around $2,500 — about half the cost of braces.
Marketplace spoke with several SmileDirectClub customers in 2019 and 2020, who said they weren’t happy with their treatment. Complaints ranged from three viewers who said their aligners did not arrive on time and/or did not fit correctly to more serious consequences, including two customers whose bites were misaligned, one who had a broken crown, and two who said they needed gum grafts following treatment.
The complaints prompted Marketplace to send four people undercover to inquire about treatments from the company. SmileDirectClub approved all four for treatments, but independent orthodontists warned treatments could result in a worsened bite, increase the likelihood of chips and wear, and even teeth falling out.
In response to the reviews of the four treatment plans, SmileDirectClub had the director of the American Teledentistry Association, Dr. Marc Ackerman, review the same plans. He thought all four were acceptable and would result in the improved appearance of smiles. The company added since the orthodontists CBC consulted had experience treating patients with Invisalign, the company’s main competitor, they should be disqualified from serving as experts.
SmileDirectClub added only one per cent of its customers complain after treatment. Read more
What else is going on?
Is Taylor Swift saving the economy?
Swifties willingness to spend thousands to see the singer’s Eras tour is indicative of the spending power consumers still have in a slowing economy…even though she’s skipping Canada. #bitter
How to run a farm inside a big city
Some farmers use roofs, some basements, but they are all bypassing the supermarket and selling directly to consumers.
Canada Bread agrees to a $50M fine for their role in the bread price-fixing scandal
The company, which owns Dempster’s, Stonemill, and others admitted that under previous ownership it worked with rivals to raise prices.
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