Selling Students into Credit-Card Debt

Citibank (C) pitched an offer at Ohio State University that few college students would refuse: free food. A company hired by the bank plastered the Columbus campus with advertisements for free sandwiches at a local haunt, Potbelly, and free burritos from La Bamba restaurant. The only catch? Students had to submit a credit-card application before any free food crossed the counter.

The food-for-credit application scheme caught the attention of Ohio's attorney general, Marc Dann, who sued Citibank on Sept. 19, alleging that the campus advertisements violated the state's consumer-protection laws. Dann has partnered with students and professors at Ohio State's Moritz College of Law to prosecute the suit, which accuses Citibank of using bait-and-switch advertising, failing to clearly state conditions of the offer, and tempting students with a prize without disclosing all the conditions.

The suit seeks more accountability in credit-card marketing practices. "Citibank is starting out the marketing deceptively and banking on the fact that these kids won't read the fine print," Dann says.

Read more at: Selling Students into Credit-Card Debt