A promotion of six months interest free for purchases of $200 or more on Home Depot and Lowe's private-label cards turned into a multi-million dollar loss for the two retailers and their issuer, Monogram Credit Card Bank of Georgia. It also resulted in the retailers changing the method used to allocate payments between promotional and non-promotional balances.
  The loss stems from the settlement of a class-action suit filed in November 2003 against The Home Depot Inc., Lowe's Companies Inc. and Monogram, which is owned by GE Consumer Finance.
  In the suit, cardholders charged Monogram with unfair and deceptive practices, claiming the retailers allocated payments to promotional balances before regular balances in violation of the promotions' terms. The settlement covers cardholders who participated in the promotions between Nov. 24, 2000, and Sept. 1, 2004.
  Under the settlement, Monogram, Lowe's and Home Depot will send award cards to the affected customers, entitling them to a $5 rebate on qualifying purchases of $15 or more at Home Depot or Lowe's stores. The rebates cannot be redeemed for sales through the retailers' catalogs or Internet sites, or over the phone.
  If fewer than 20% of the cards are redeemed, the retailers and Monogram will make contributions to consumer-related organizations. That contribution will be between 20% of the face value of the award cards issued and the sum of the actual amount paid by the retailers and Monogram to redeem the cards and the first $500,000 of the settlement of their costs of administering the settlement.
  Teresa C. Kaminski and John R. Kaminski Jr., who filed the Seattle lawsuit that turned into the class action, will receive $5,000. The retailers and Monogram also agreed to pay the plaintiffs' attorney fees of $1.5 million. The settlement is worth about $4 million and affects more than 2 million individuals.
  The settlement also resulted in a change in the methods used by Home Depot and Lowe's to allocate payments between non-promotional and regular balances. Both now generally apply payments first to the regular balance, except in the month in which the promotion expires, when payments will be applied to promotional balances first.

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