UPDATE: Great news, Hubsters! Just two days after a federal judge in South Dakota rejected a bid by First Premier for a gag order against CardHub (currently part of WalletHub), the subprime credit card issuer abandoned its controversial lawsuit in a one-sentence document filed late last week. This is an important victory for consumer rights as well as the health of the credit card industry, and we would really like to thank everyone who supported us throughout our fight.
After all, First Premier’s surrender follows a backlash of criticism over its litigation tactics, including coverage by the Wall Street Journal, Consumer Reports, CBS and even Buzzfeed, plus commentary from leading consumer rights activists.
“First Premier is one of the worst credit-card issuers out there,” said Chi Chi Wu, an attorney at the National Consumer Law Center. “It wouldn’t surprise me at all if First Premier” was “just trying to silence CardHub.”
They did not succeed, however. In what CardHub’s lawyer Deepak Gupta describes as “a victory for credit-card customers everywhere,” we refused to cave to the bullying tactics of First Premier and will continue to uphold our promises of transparency and advocacy for the consumer.
People often ask me what separates CardHub from the various other credit card comparison websites that exist in the marketplace. One of the reasons, I say, has to be CardHub’s commitment to the consumer. It truly is our mission to provide consumers with all of the tools and information they need to make the best possible decisions for their wallets.
Sure, you might be thinking, but any CEO would say that! While that might be true, CardHub really does go to the mat for the folks who use our website. In fact, allow me to share a story that illustrates just how far we’ll go for you.
Some of our readers may know this already, but First Premier Bank recently sued both CardHub and me personally. Why did they do this?
Because CardHub is the only widely-known credit card comparison website that will not cave to First Premier’s pressure to obscure card terms and rob consumers of much-needed transparency. You see, First Premier has bullied every other major credit card comparison website into removing the details about its credit cards from their card listing pages, but CardHub has continued to list their rates, fees, and other important terms.
Why, you ask, would First Premier wish to hide the terms of its products from the general public, thereby inhibiting the ability of consumers to compare these products to the rest of the market?
The answer is simple: First Premier’s credit cards are a rip off. That’s why the company’s primary credit card offer has been selected by CardHub’s editors as one of the Worst Credit Cards on the market for four consecutive years. And we’re not alone in criticizing First Premier’s cards. Consumer Reports, for instance, called one of First Premier’s cards “America’s worst credit card.” I mean, it charges a $95.00 processing fee prior to account opening, a $75.00 annual fee during the first year, $120 in annualized membership fees in each subsequent year, a 25% fee for any credit limit increase, and a 36% interest rate!
So, as of today, we are currently in litigation fighting on behalf of consumers for a more transparent credit card market. Faced with media attention and public scrutiny of its legal theories, First Premier has already backtracked from its initial demand that we remove all information pertaining to their products. Now First Premier is complaining that a single link from our website to theirs—a link that no longer exists—means that we are liable for “trademark infringement,” to the tune of $5 million. We are confident the United States District Court for the District of South Dakota will quickly dismiss these heavy-handed scare tactics masquerading as a lawsuit.
As such, we will continue to uphold our promise to you, the user. We will continue to display the terms of more than 1,200 credit card offers on our website, making direct comparison and positive decision-making possible. And we will allow neither intimidation nor legal action to compromise our ideals. That, not some frivolous lawsuit, you can count on.
It is our hope that by standing up to First Premier we will accomplish two objectives. First, we will enable consumers to compare and review cards and ultimately make better financial choices. Second, we will set an example for credit card comparison websites that have been silenced either directly or indirectly by First Premier, and hopefully set a legal precedent based on the First Amendment. While this would create more competition for us, a more transparent ecosystem is better for everyone involved.
Ultimately, this is my interpretation of the events in play, and if you want to read all of the supporting documents related to the case, please click here.