A consumer group has obtained and published a confidential agreement that shines a light into the way big universities give up student information so that big banks can market their credit cards on campus and off.
The contract gives Bank of America exclusive rights to market its cards bearing Florida State University trademarks to students at least a dozen times a year, using mailing lists containing contact information of 225,000 students and alumni.
In exchange for allowing the marketing efforts, the school’s athletic fund-raising arm, the Seminole Boosters, were guaranteed $10.7 million in incremental payments, according to the document posted by the Consumer Warning Network. The agreement was signed in 2002 by the booster group and MBNA America, and runs through 2009. MBNA America has since has been bought by Bank of America.
The next installment payment of $1.28 million is due to be paid July 23.
The mailing lists turned over to Bank of America include names, postal addresses, and where available, telephone numbers and e-mail addresses.
Under the contract, BofA has the right each year to: conduct at least six direct mail campaigns to the students, alumni and boosters; make at least six telemarketing contacts to the same groups; market to all students; and hold on-campus promotional campaigns including tables and postering at major school events.
When conducting direct promotion events, the contract states, the bank “may have as many as four direct promotion locations … within the athletic facility holding the game or athletic event.” Typically, that’s where banks looking to get students to sign up for credit hand out hats or T-shirts as inducements.
Even students and alumni who sign up for a card aren’t done with the marketing. Twice a year, BofA turns over a list of those who got a credit card to the boosters, who in turn use that list to solicit new members.
Ironically, FSU is at the same time showing its students a flashy online video discouraging credit card usage. The video, titled “Avoiding the credit card monster,” includes a comic segment titled “Top10 reasons you don’t need a credit card.” Reason No. 1: “That T-shirt they’re giving you only costs $2.99.”
The unveiling of the contract’s details comes at a time when such arrangements are under investigation by state attorneys general in New York and Florida. Aggressive student marketing tactics of credit card issuers have also drawn the attention of Congress, which is considering legislation to limit such tactics.
See related: Congressional testimony: Student credit card issuers under investigation