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More than 60,000 cardholders of Direct Merchants Credit Card Bank MasterCards will be receiving refunds in the next three to four months. The card issuer reached a settlement last week with the Office of the Comptroller of the Currency regarding its sales and marketing practices used in connection with an offer for a partially secured credit card. Under terms of the agreement Direct Merchants will pay approximately $3.2 million in restitution. The OCC may also levy civil fines. The OCC discovered problems with Direct Merchants credit card marketing during a routine examination of the bank's operations. The agreement relates to marketing campaigns conducted between March 1999 and June 1, 2000. During that period, the bank mailed 84 million credit card offers. The OCC took issue with 13.5 million of the solicitations. Approximately 13% of the applicants received a card other than the one prominently featured in the promotions. Other issues identified by the OCC were primarily technical violations such as not properly describing a "processing fee" as a "finance charge" under the Truth in Lending Act. Pursuant to the OCC agreement, Direct Merchants Bank has agreed to refund all processing fees cited by the OCC. In addition, it has agreed to refund to approximately 500 customers the difference between the interest that they would have paid on the credit card featured in the offers and the interest they actually were charged on the alternative card they received. In most cases, the difference was 1% or 2%. Direct Merchants says the credit card offers involved were part of test marketing campaigns and were stopped before the OCC brought the matter to the bank's attention. The bank also noted that all of problems were or have been corrected. Direct Merchants Credit Card Bank is owned by Metris Companies. For more information visit
