Household HSBC Watch

November 26, 2002

Sandra L. Derickson
CEO, Household Retail Services
2700 Sanders Road
Prospect Heights IL 60070

I am writing today to follow up on consumer complaints relative to processing of payments. There is great concern about an issue at Household Retail Services. Consumers are reporting that they were denied access to the online payment system and the telephone payment system.

It was reported to us that the telephone payment system could not be used unless the account was past due. On the other hand, consumers were told that when their account is past due less than 30 days their account was closed, thus it was not accessible through the online payment web site.

Numerous complaints over the past 24 months indicate late processing of payments. Household Watch expected to see resolution in this matter with the advent of the online payment system. We thought we saw consumer-friendly changes at Household Retail Services and looked forward to the future. This expectation is short lived if the problems reported above are not addressed and resolved. There are always a few “bumps in the road” when a new project or system is implemented, and we expect that. We do not expect the consumer to be in a loop that does not allow any way to make a payment except through the mail, a medium that is not failsafe unless sent with proof of delivery.

Please comment on these statements:

“I have had some recent problems with Household Bank and their handling of my CompUSA card. They never changed my address correctly, I went late (less than 30 days), they cancelled my card (hurt my credit) and although they provide an online payment web site, I can’t use it because my account is closed. How’s that for sabotage?

In addition, when I called their customer service and spoke with a SUPERVISOR, I was first told “We don’t have online payment set up.” When I explained that they did, as a link from CompUSA’s web site, she put me on hold, came back and said “Oh, it’s there, but they’re not signing anyone up for it yet.”

I then explained that I called the Web Support line and was told that payments can be made, but not by me, because my account is closed. This supervisor had NO IDEA that payments could be made online.”

“Had an account with HRS for the purchase of a new motorcycle. My wife and I were buying a new house, so I had to pay off the loan to get financed. They wouldn’t take the payment over the phone because it wasn’t late, and after I mailed them the payoff, they wouldn’t fax me a payoff receipt. It delayed the purchase of my house for almost a month. That was in July and I still have not received the title for the motorcycle.”

Please state the policy for using the telephone payment system and the online web site at http://hrsaccount.com so the consumer can be informed. Please state the costs associated with transactions through the respective mediums, and if there are additional costs tell us why. In keeping with a reciprocal policy, since HRS is allowed to record our conversations with them, we reserve the right to record their conversations with us as we get to the bottom of this matter.

Sincerely

Household Watch/HRS Watch Staff