Credit card holders out thousands after deal between company, bank goes bad

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's 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.

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 was extremely humbling — $4,500 is not a little amount of money, especially for someone like myself. It's huge," she said. 

"That was going to pay my next two months' rent, buy my food."

After Go Public brought McCall's case to the company's attention, Plastk refunded her entire deposit — four months after she was supposed to get it back. 

Plastk has 7,000 customers across Canada. Go Public spoke to a dozen — hundreds more have posted complaints online — who say they too are out hundreds or thousands of dollars. 

Gail Henderson, an expert in consumer finance, says consumers who use secured credit cards backed by non-bank lenders need to be better protected.