The company behind the celebrity-sponsored Kardashian Kard has sued reality television stars the Kardashian sisters for dropping their endorsement shortly after the prepaid card’s launch.
The card came under fire for charging up to a year’s worth of fees up front (
“The bottom line is we got thrown under the bus,” says Christopher L. Rudd, the attorney for Revenue Resource Group LLC, the prepaid card marketer behind the Kardashian Kard. “We brought out a card that was, in many ways, a bargain compared to some of its competitors and we got trashed for it.”
About three weeks from its early November debut, the Kardashians pulled their endorsement, and the website that sold the card was shut down. Revenue Resource Group is suing for at least $75 million after the Kardashians reneged on a two-year contract to promote the card, Rudd says, noting two celebrities he declined to name were set to sign up for similar products before the Kardashians pulled out.
The prepaid product behind the Kardashian brand “had some neat facets,” Rudd says. “It really did. It had a lot of neat features that made it great for other licensees.”
Shortly after the card’s November launch, Connecticut’s attorney general, Richard Blumenthal, blasted the product, calling it “filled with gotcha fees and charges, … raising concerns about potential threats to consumers, particularly young adults,” according to a press release issued at the time.
Though minors could not purchase the card, analysts said its celebrity endorsement strongly suggested a focus on teens.
Sunrise Community Bank, which issued the card, declined to comment.
The cost to buy the card was $59.95 for six months or $99.95 for a year; these figures included the card’s $7.95 monthly fee and an initial load of $5.
Upon the card’s launch, many perceived it as a “premium” prepaid card. The Kardashian sisters’ celebrity status, paired with the card’s high purchase cost, suggested a sense of exclusivity.
The high up-front cost also addressed a longstanding issue for prepaid card providers–that prepaid cards are commonly seen as disposable by end users, who buy the cards for a specific purchase, some observers said. If users pay up to a year in fees up front, they may feel a greater attachment to the card and would use it for more spending, they said.
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