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Connie Prater

Kardashian Kard kaput!

Less than a month after its debut, the Kardashian Kard may be kaput. Kanned, Kanceled. Klipped. Kremated.

The prepaid debit card featured high upfront fees ($59.95 for six months or $99.95 for a year-long membership) and was heavily marketed to teens and young professionals. Consumer groups warned teens, their parents and young adults not to be swayed by the card's hip promoters, celebrity sisters Kim, Khloe and Kourtney Kardashian.

Consumers Union, the nonprofit owners of Consumer Reports magazine, even started a campaign asking consumers to sign e-cards urging the Kardashians to take their names off the prepaid card. According to a spokesman, 45 people had signed the petition by Nov. 25.

It looks like the Kardashians have heeded the advice.

TMZ.com reports that a lawyer for the celebrity sisters has sent a letter of termination of the marketing contract to the bank and company issuing the card. In the letter, obtained by TMZ, the attorney says the deal is off and the Kardashians will return the "initial deposit" money they received.

Connecticut threat
The sisters apparently pulled out after Richard Blumenthal, the attorney general of Connecticut, warned on Nov. 26, 2010, that the card may violate that state's consumer protection laws, and launched an investigation. The Kardashian attorney was also concerned that the card may violate a provision of the new Wall Street reform law that bans selling abusive products. Dash Dolls, the Kardashian sisters' company, agreed to the deal to use their names, likenesses and endorsements of the card only with the understanding that the product conformed to all laws, rules and regulations, according to their attorney.

"The Kardashians have worked extremely long and hard to create a positive public persona that appeals to everyone, particularly young adults," the letter said. "They have been successful in doing so because they are recognized as honest, ethical, and fun-loving individuals who are kind and caring to others. 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."

Blumenthal said he was pleased with the pull-out:

"A larger lesson -- common to other prepaid debit cards -- is that targeting young adults with predatory card terms and conditions may bear close scrutiny and caution," he said in a statement. "Keeping up with the Kardashians is impossible with this card, where consumers lose money before they use money. Even before consumers spend a dime, the Kardashian Kard fees swallow the card's value."

Consumers Union applauded the move to cancel the card.

"After enduring a week of bad publicity, the Kardashians have made the right call by pulling out of the prepaid card business," Gail Hillebrand, director of the group's Defend Your Dollars consumer advocacy campaign (www.DefendYourDollars.org), said in a press release. "But other prepaid card rip-offs are rampant in the marketplace and consumers remain vulnerable to high fees and weak protections."

A word of warning
The group added this warning to other celebrity hawkers of cards:

"Any other celebrity or business that is thinking of associating its name with a prepaid card should take a close look at the fees and protections, and say 'no thanks' unless the fees are low and the missing consumer protections are added," said Pam Banks, a Consumers Union attorney.

Check out Saturday Night Live's comical take on the Kardashian Kard's demise:

 

UPDATE: Looks like the Kardashian sisters are going to end up in court over their controversial prepaid debit card. According to a Fresno Bee newspaper article, the company hired to market the now-defunct Kardashian Kard filed suit this week in California, charging breach of contract by the celebrity sisters.

Revenue Resource Group LLC claims it lost millions when the Kardashians pulled out of the deal. According to the article, the suit says the sisters were told on at least two different occasions about the fees associated with the card and they apparently had no objection to them. However, when a firestorm of negative publicity came down on them, the sisters backed out.

Stay tuned for the legal fight. 

See related: Consumer group warns teens not to keep up with the Kardashian Kard,
Why celebrity cards fail

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