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Advanta Bank Closed by Utah Regulators
Posted by: John Tozzi on March 22, 2010

Advanta Bank Corp., the small business credit card lender that last year settled ?unfair and deceptive practices? charges with regulators over rate hikes imposed on small business customers, was seized by Utah banking regulators Friday.

?We just found them to be in an unsafe and unsound condition,? Michael Jones, chief examiner for the Utah Department of Financial Institutions, told me. ?They needed additional capital because they were taking significant writedowns and losses on their [small business] credit card portfolio.? Advanta spokeswoman Amy Holderer declined to comment but said parent company Advanta Corp. would issue a statement in an 8-K filing today or tomorrow.

What does this mean for small business borrowers? When Utah regulators seized Advanta bank, the FDIC was named receiver and could not find a buyer for Advanta?s operations. For borrowers who owed money to Advanta Bank, ?right now the FDIC is the owner of those loans,? Jones says.

Some Advanta borrowers have already had their debts sold to third-party debt collectors. Advanta?s seizure shouldn?t affect them. It?s unclear whether it will affect those whose debt is now owned by the FDIC.

Advanta issued exclusively small business credit cards. In 2007 the bank was the fifth-largest issuer of small business bank credit cards (which excludes American Express and Discover), with 1.3 million accounts and $14 billion in annual payment volume, according to The Nilson Report, a credit card industry newsletter. Business owners often use credit cards for convenience to cover every day expenses. Many also use them as a source of longer-term financing in lieu of bank loans or credit lines.

Many Advanta borrowers, hit by rate hikes, have been trying to negotiate lower payments and interest rates, and at least one group was seeking class action status for a lawsuit against the bank. The FDIC received 976 complaints about Advanta raising interest rates in the 18 months leading up to Jan. 2009. (Peruse the comments on this post and others for small business owners? stories about their dealings with Advanta.)

Advanta stopped making new credit card loans and cut off credit to existing customers in May 2009. By that time, the bank had become notorious for repricing interest rates, sometimes to over 30%, on cards opened with 0% APRs or other low teaser rates. In July, Advanta settled with the FDIC over rate hikes and agreed to pay $35 million in restitution, without admitting nor denying wrongdoing. Advanta Bank?s parent company, Spring House (Pa.)-based Advanta Corp., filed bankruptcy under Chapter 11 in November.

In filings with regulators, Advanta reported $205 million in loan charge-offs in 2009. In December, the bank reported $1.62 billion in assets and $1.52 billion in liabilities.

Advanta?s seizure is unlikely to have much effect on the availability of credit for small businesses. Advanta cut off all new lending, including to existing customers, last year. The most significant consequence may be whether those borrowers trying to renegotiate their payments and write down their debts will have an easier time doing so now that the FDIC is their creditor.

I have a call in to the FDIC. We?ll update as we get more information. For Advanta coverage from our archives, click here.

Advanta Bank Closed by Utah Regulators
Posted by: John Tozzi on March 22, 2010

http://www.businessweek.com/smallbiz/running_ ... ta_bank_cl.html

Advanta Bank Corp., the small business credit card lender that last year settled ?unfair and deceptive practices? charges with regulators over rate hikes imposed on small business customers, was seized by Utah banking regulators Friday.

?We just found them to be in an unsafe and unsound condition,? Michael Jones, chief examiner for the Utah Department of Financial Institutions, told me. ?They needed additional capital because they were taking significant writedowns and losses on their [small business] credit card portfolio.? Advanta spokeswoman Amy Holderer declined to comment but said parent company Advanta Corp. would issue a statement in an 8-K filing today or tomorrow.

What does this mean for small business borrowers? When Utah regulators seized Advanta bank, the FDIC was named receiver and could not find a buyer for Advanta?s operations. For borrowers who owed money to Advanta Bank, ?right now the FDIC is the owner of those loans,? Jones says.

Some Advanta borrowers have already had their debts sold to third-party debt collectors. Advanta?s seizure shouldn?t affect them. It?s unclear whether it will affect those whose debt is now owned by the FDIC.

Advanta issued exclusively small business credit cards. In 2007 the bank was the fifth-largest issuer of small business bank credit cards (which excludes American Express and Discover), with 1.3 million accounts and $14 billion in annual payment volume, according to The Nilson Report, a credit card industry newsletter. Business owners often use credit cards for convenience to cover every day expenses. Many also use them as a source of longer-term financing in lieu of bank loans or credit lines.

Many Advanta borrowers, hit by rate hikes, have been trying to negotiate lower payments and interest rates, and at least one group was seeking class action status for a lawsuit against the bank. The FDIC received 976 complaints about Advanta raising interest rates in the 18 months leading up to Jan. 2009. (Peruse the comments on this post and others for small business owners? stories about their dealings with Advanta.)

Advanta stopped making new credit card loans and cut off credit to existing customers in May 2009. By that time, the bank had become notorious for repricing interest rates, sometimes to over 30%, on cards opened with 0% APRs or other low teaser rates. In July, Advanta settled with the FDIC over rate hikes and agreed to pay $35 million in restitution, without admitting nor denying wrongdoing. Advanta Bank?s parent company, Spring House (Pa.)-based Advanta Corp., filed bankruptcy under Chapter 11 in November.

In filings with regulators, Advanta reported $205 million in loan charge-offs in 2009. In December, the bank reported $1.62 billion in assets and $1.52 billion in liabilities.

Advanta?s seizure is unlikely to have much effect on the availability of credit for small businesses. Advanta cut off all new lending, including to existing customers, last year. The most significant consequence may be whether those borrowers trying to renegotiate their payments and write down their debts will have an easier time doing so now that the FDIC is their creditor.

I have a call in to the FDIC. We?ll update as we get more information. For Advanta coverage from our archives, click here.

What's worse about this company and I guess all these credit card crooks is that now they are calling people that have the same last name as the debtor.  They are calling my parents, a sick elderly couple that have nothing to do with debtor very early in the morning every morning.  It wakes them up, then these crooks stay on the line without saying anything for awhile.  Can be scary and then they ask for the debtor.  No matter how many times they told them wrong number this person does not live here they still kept calling.  Till one day I was there and answered myself and had to argue with the guy from India to stop calling and that we were going to report them to the FTC which we did.  And the calls stopped.

Whether they are actually calling you or it?s a wrong number.  Everyone has rights.  Send a complain to the FTC, write letters to congress, you governor, your local officials.  Write a letter to your local newspaper.  Call your TV news.  But this harassment has got to stop.

There was a great but very very sad story on Yahoo news in Jan. about a man married with two kids.  Successful exec of a company that had been laid off and could not find a job even as a janitor in a school.  To hide the financial problems from his wife and kids, he was continuing to pay bills with credit cards and taking cash advances just to pay for mortgage and basic necessities till credit companies jacked his interest rates to the maximum just before the new law took effect.

Well he had to stop paying them and they started harassing him day and night.
The end of the Story and the sad part "He went into a deep depression and killed himself".  Or real truth, the credit card companies killed him.  And there are many cases like that one surfacing these days.  All for what so their CEO's get an extra million on their yearly bonus, HOW SICK CAN THAT BE!!!!!
It's not enough they steal our jobs and outsource them to India so they make more money they also have to kill us for a buck.

Does anyone know the address for Advanta Collections? I want to request proof that they have the right to collect on this business account.

Don't deal with them, they are collection agent, they don't belong to the bank.

I just started getting calls from this number. This is my ex-husband's account. This is a terrible company to have to deal with. This needs to stop

I have been getting calls for months now asking about my long ago Ex husband's company account.The account was opened years after we were divorced. I have told them that I have NOTHING to do with it. My daughter too has been getting harrassment calls. Calls come in Sat afternoon 2-3 times and Sundays @8 AM not to mention during the week. I called Advanta management who took me off the call list......A month or two later, I'm getting calls on my cell phone from this number. (an other numbers) The problem was two missed payments. They had been making payments for months since. The account was frozen anyway.
These people are out of control.........

This number called our home at 5:45am.
What's up with that.... Is it legal to bug us so early.

Advanta Credit Card,
305-533-9889
718-374-8092
919-872-2436
215-385-3300
303-583-8753
They have a lot of Numbers,

caller ID read Hatboro, PA ... did not answer ... left no message

I called Advanta's 800 number for an address change, and just after I hung up, I received a call from 215-385-3300. It was the same person I spoke to when I had just called... he said he had lost the screen with my address and needed me to repeat my street address. (I was concerned that it may have been fishy, but he didn't ask for anything else, and that was the entire call)

So, it's not an 'Advanta Collection' number, but just a number for Advanta in general.

three calls where received at 11:53  11:56  and 11:57   nasty people calling after beeing told the individual does not work here. i call this arressement since i don't know the individual they are looking to collect from.

to put this to bed, is to catch them breaking the law, and then make a settlement that reflects your best interests.

after beeing told numerous times,in the past two months, that the individual does not work here any more, on the 19th day of january 2009 at about 11:50 am, one guy with an african american dialect, and very igorant, told me " he does not know who i am " that the individual he was asking about, ows them money from a personal account, therefore violating the Federal Dept Collections Practice Act.
any legal jive on this matter will be welcomed.

This "bank" is a loan shark operation veiled in white. My in-law had one of their "small business" accounts and during a down turn in 07, fell behind two payments on a $8,000 balance. They called his home, his office, his mother, his neighbors. The kicker was when one of their "account specialists" got his 9 year old son on the phone and told the child that "daddy owes the bank a lot of money and if he doesn't pay something soon, he's going to be in bad trouble. will you tell your daddy that for us, please?"
My sister and brother-in-law nearly went through the roof when the kid with tears in his eyes relayed the message.
After this episode, I wouldn't waste polluted water on anything or anyone Advanta if it were on fire.

Hi Gotcha, regarding your situation: the way I understand it, if you give them your social security number you are personally responsible for all charges in spite of it being a business card used for the business only.  Did you give them your EIN number instead, or did you give them a PG (personal guarantee = social security number)?  Also, because it is a business card, it's not governed by the same rules as a personal credit card when it comes to collections.

You may need to contact your attorney general and an attorney.  If the corporation is bankrupt, Advanta should have been included in bankruptcy proceedings.  I think you may also need to contact the person who filed your company's bankruptcy to find out what's going on on their end.  I hope this is straightened out for yo.

Advanta collections, Philadelphia, PA.  My account was locked by the fraud department because I had made two large (nearly $5000 in total) payments in 2 weeks, then made 8 balance transfers (I did not want to be caught up in their rumored rate jackings for the purchases and cash advances I had made throughout the months).  

Fraud wanted to verify that the payments I had made would post -- they said it usually takes 60 days, in spite of 'posting' because that's how long the banks have to recall the payments.  Advanta set up a conference call with both of my business account banking institutions, and both banks verified that payment was cleared.  The first check almost didn't, because the fraud department asked if a check was going to clear, and the banking rep said 'no', Advanta was fine with that until I said 'NO wait a minute' and had the banking rep verify the previous check had indeed cleared instead of a new payment going through my bank account.  The banking rep apologized for the misunderstanding.  Advanta fraud (through whom the misunderstanding came) did not.

Other than that I've had a good experience so far with Advanta. Knock on wood.

Advanta has been calling and have ignored certified return receipt demand notices requesting proof of signed contract and validation.  Advanta has also been told to stop calling and for all communications to be done in writing.  They say they can do what they want, that it is a commercial account, I respond the corp is bankrupt and if they are pursuing this personally they then are obligated to follow the consumer protections laws and ignore that too, and keep calling.  Calls are recorded and saved, and there are reams of written correspondence that has been saved. For the last two months they keep saying it is going to charge off end of week, but this must be one long week.

Curious how they plan a legal action failing to respond to all written communication...any thoughts to put this to bed?

This number is a collections number from Advanta Credit card co in PA