Kardashians Win Debit-Card Endorsement Case   Leave a comment

Just when you thought the Kardashian brand couldn’t get any bigger – they have another accomplishment to be proud of. The reality show stars, Kim, Khloe and Kourtney, recently were victorio

us in a debit-card endorsement case in which they were being sued for $75 million.

The lawsuit was dismissed by a Fresno Superior Court Judge and the Kardashians were awarded $6,825 for their le

gal fees, according to the Associated Press.

Judge Jeff Hamilton made the official announcement on June 7th indicating that the Revenue Resource Group, which was suing the Kardashian sisters, had not shown that it could win the breach of contract case. The sisters, who were endorsing a debit card issued by the Revenue Reso

urce Card, withdrew their endorsement just three weeks after it was launched.

Revenue Resource Group stated that subsequent to the Kardashians canceling the contract, the company ran into financial troubles. In addition, the company argued that the Kardashians’ negative comments to the media ruined their reputation. However, Judge Hamilton claimed that the overall negative media associated with the card’s fees caused the problems. The sisters could not be sued for critic

izing the debit card’s high fees as that would violate First Amendment rights, he added.

The reality TV stars made the decision to end the relationship with the card issuer shortly after the Connecticut Attorney General Richard Blumenthal warned that the card fees were “predatory”.   Specifically, the start- up fees were $99.95 for a year to receive the card with the Kardashian sisters faces on it. Canceling a card was $6 and there was a $1.50 charge just for talking to a customer service operator. The family felt they should not advocate a product that might be considered “unlawful”.

Consumer advocacy groups were quick to criticize this card when it was launched and this well-publicized case should help remind the industry that exorbitant fees will not be tolerated.
 
The prepaid debit card industry is changing. More and more Americans are purchasing prepaid debit cards over traditional cards. According to a survey by Firstsource Solutions, a business

outsourcing company, the growth in usage has been dramatic, climbing to $37 billion in loadings last year, versus $18 billion in 2009 and $9 billion in 2008. The amount loaded onto prepaid cards has quadrupled in two years. Even American Express, which traditionally serves the higher-income market, recently announced that it too wants to participate in this growing space by launching its own prepaid card.

Prepaid cards are pretty much a no-risk business for the card issuers since consumers load a card with funds and then are limited to spend only that specific amount of money. There are no delinquencies and no defaults to deal with. It is less risky for consumers as well as they cannot spend more than they can afford.

Read more: http://www.businessinsider.com/kardashians-win-debit-card-endorsement-case-2011-6#ixzz1QP9OM9nw

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Posted June 26, 2011 by ilanamelissagreene in Uncategorized

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