Kardashian Kard Lame Launch: Who’d Want One Anyway?

January 12th, 2011. By LucyC

Keeping Up With The Kardashians? Maybe not… The Kardashian sisters, Kim, Khloe and Kourtney are facing a lawsuit over breach of contract with a company that created a prepaid debit card—the Kardashian Kard, designed specifically to be endorsed by the celebrity sisters and draw on their fan base.

An enterprising idea. Perhaps a little too enterprising. The Kard—oops—card—made quite an impact on Attorney General Richard Blumenthal who issued a warning about what he called its “predatory” fees. Predatory lending practices certainly seem to be the theme de jour—and there is long list of credit card companies, banks and mortgage companies facing a laundry list of complaints over unfair business practices.

The Kardashian Card, a pre-paid debit card by Mastercard developed by Revenue Resource Group LLC, would appear to be no exception. In fact, Blumenthal recently described the card as “filled with gotcha fees and charges, such as $99.95 annual fees, $7.95 monthly fees…ATM withdrawal fees, bill pay fees, loading fees—and even charges for talking to a live operator at their service center and a card cancellation fee.” (Fresno Bee)

Given all the bad publicity the card received—and deservedly so—the Kardashians rushed in into face-saving mode and hired a lawyer, who sent a contract termination letter to the debit card company University National Bank, which issued the cards, which pulled the company’s operating license that day. And presto, bingo—you have the makings of a lawsuit.

The suit alleges that the Kardashian sisters, their company Dash Dolls LLC, and their mother, Kris Kardashian Jenner, improperly terminated their two-year contract to promote the card—just three weeks after its November 9 launch.

The injured parties are asking for $75 million in financial losses. Holly Hannah! That’s a lot of dough! Presumably, that’s an estimated $75 million in revenue that would have been generated from those fees that Blumenthal called predatory.

You have to wonder why anyone would use a card so loaded with fees—and if those fees were made obvious when applying for the card? And while we’re on the subject of transparency—were the Kardashians aware of the fees?

Nancy Torosian and her husband Claude Butler, the brains behind the prepaid debit card, claim that the Kardashians were aware of the fees. In their lawsuit, they apparently state that the sisters received a fee schedule for the card on two occasions and received an explanation of how the costs compared to other prepaid debit cards on the market. Each sister signed the contracts, which also acknowledged that they knew about the fees.

Of course, when $20 here or there in fees is not even a minor annoyance—heck, it’s less than pennies to the K-sisters, why would fees even register with them as a possible cause of concern?

So, it does appear to be about saving face. According to a report in the Fresno Bee, the Kardashian’s lawyer stated in the notice of termination that “The Kardashians have worked extremely long and hard to create a positive public persona that appeals to everyone, particularly young adults.” And “”Unfortunately, the negative spotlight turned on the Kardashians as a result of the attorney general’s comments and actions threatens everything for which they have worked.”

Just for the record, the company that developed the card has been shut down, but not before some 250 cards were issued. So, I wonder what happened to those folks. Are they liable for any fees they may have incurred during the short life-span of the Kardashian Kard?

Makes me wonder, too, about how many people really would sign up for a Kardashian Kard—honestly, would you? And from looks of it, you’d think that most eager beavers for the Kard would sign up upon launch—yet, in the first 2-3 weeks of launch, only 250 Kards had been issued? Pretty lame launch, I’d say. Maybe saving face was less about bad “predatory” or “pernicious” practices and more about low demand…

But it begs the question: if there hadn’t been any bad publicity—would it have been business as usual for all parties concerned? And, would that have been alright?

You know—someone should do a reality TV show about unfair business practices…

Tags: Attorney General Richard Blumenthal, Kardashian debit card, Kardashian Kard, Khloe Kardashian, Kim Kardashian, Kourtney Kardashian

This was posted on Wednesday, January 12th, 2011 at 10:57 am and is filed under Consumer Fraud . Feel free to respond, or trackback. Read our comments policy.