Home Depot Credit Card ‘Balance Protect’ Services ‘Virtually Worthless,’ Class Action Claims

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Add-on “balance cancellation” services offered by Citicorp Credit Services, Inc. for its Home Depot credit cards are “virtually worthless to almost all cardholders” given how difficult it is to qualify for coverage, a proposed class action alleges. 

The 10-page lawsuit claims prospective and active Home Depot credit card holders were not informed of the limitations, eligibility restrictions and monthly costs with regard to Citicorp’s “Balance Protect” services at the time of sale, nor informed that they were enrolling in the service at all. Per the case, neither the plaintiff nor other consumers would have signed up for the credit cards or Balance Protect had they known the truth about the underlying service; its conditions, limitations and monthly fees; and the difficulties they’d experience in invoking the apparent protection of—and ultimately canceling—the service. 

“Plaintiff and class members were signed up for Balance Protect without their affirmative consent, and when they did not meet some or all the criteria to seek the benefits of Balance Protect upon occurrence of a qualifying event,” the suit claims. “The utility of Balance Protect is outweighed by the harm to cardholders, in the amount of the additional amounts that must be paid monthly.” 

According to the complaint, Citicorp’s use of pin-pad screen sequences displaying the Balance Protect option in the middle of the application process as one of the “click through” question screens has led consumers to “conflate” signing up for a Home Depot credit card and enrolling in balance cancellation services, and made it more likely that proposed class members “would not realize that [they] were enrolling in Balance Protect in addition to signing up for the store card.” 

In truth, proposed class members “received unclear written prompts which made them think they were only acknowledging their application for the Home Depot credit card instead of enrolling in Balance Protect,” the lawsuit claims, alleging Citicorp’s use of confirmation screen text was formatted to “avoid providing clear and conspicuous notification” of enrollment into add-on balance cancellation services.

Moreover, in-store agents of Citicorp Credit Services and non-party Home Depot were “incentivized” to enroll customers in add-on products such as Balance Protect, the case claims. When consumers inquired into the “ambiguous confirmation screens” upon signing up for Home Depot credit cards and raised questions about what they were signing up for, they were assured that “it was only for the store credit card,” the lawsuit says.

Overall, Citicorp failed to properly train its representatives to adequately disclose the terms and existence of Balance Protect to the plaintiff and proposed class members prior to the completion of the enrollment process, the suit alleges. Still further, the case claims customers who later contacted Citicorp’s customer service about their enrollment in Balance Protect and questions concerning cancellation of the services were given “ambiguous and inaccurate information” in return and generally unsuccessful in their cancellation attempts. 

“When cardholders sought to cancel Balance Protect, defendant’s agents failed to adequately follow these requests,” the lawsuit alleges. 

The case goes on to mention that the enrollment of consumers into the Balance Protect service was addressed in a 2015 consent order between the Consumer Financial Protection Bureau and Citibank, N.A. and Department Stores International Bank. Under the consent order, Citibank was required to pay no less than $700,000,000 in restitution to approximately nine million cardholders enrolled in Balance Protect. 

Although Citibank was required by the consent order to develop and implement a compliance plan to inform Balance Protect enrollees of “the restrictions, possible benefits, fees, costs, expenses, charges, and billing practices” of the service, the defendant’s compliance plan was, according to the lawsuit, “deficient” in that it did not cancel the Balance Protect services of cardholders such as the plaintiff, who allegedly never consented to be enrolled.

“Where a cardholder was signed up for Balance Protect for up to 12 months, they were supposed to be refunded all fees paid for this service,” the case says of the consent order. “Where a cardholder was signed up for Balance Protect for more than 12 months, they were not refunded fees beyond 12 months. The Consent Order did not require defendant to cancel a cardholder’s enrollment in the Balance Protector [sic] service.”

Citicorp Credit Services “knew or should have known” through reasonable diligence that certain conditions would make Balance Protect customers ineligible for some or all of the benefits of the service, and was obligated to inform the consumers of these limitations, the complaint says. The defendant, the lawsuit alleges, “engaged in deceptive, misleading and unfair acts by failing to cancel plaintiff’s enrollment in the Balance Protector [sic] service and refund all fees paid by plaintiff.” 

Broader still, Citicorp, the case claims, “regularly and consistently denies and constructively denies” the claims of proposed class members who’ve sought to invoke their Balance Protect coverage due to qualifying events. The plaintiff, a Nassau County, New York resident who insists he never affirmatively consented to sign up for Balance Protect, claims his Home Depot credit card balance has “hovered around $4,000,” meaning his monthly fees for the Balance Protect program are more than $40. 

The man claims he was signed up for Balance Protect for more than 12 months at the time of the July 2015 consent order and is thus entitled to a full refund of the amount he’s paid for the service.

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