Kardashian Kard: Sisters Back Out After Controversy

Last Updated Nov 30, 2010 12:16 PM EST

It's never too late to do the right thing. Bowing to pressure, Kim (pictured), Kourtney and Khloe Kardashian have apparently decided to cut ties with the fee-heavy prepaid card they launched earlier this month called Kardashian Kard.

According to Connecticut attorney general Richard Blumenthal, who recently issued a warning to parents against the card and its "predatory" fees, a Kardashian family attorney has issued a letter to the card company requesting it stop using the sisters' names and images immediately. "The Kardashians have worked extremely long and hard to create a positive public persona that appeals to everyone, particularly young adults," says the letter from Dennis Roach, legal counsel of Dash Dolls LLC, which represents the three sisters; Blumenthal sent me a copy of the letter. "Unfortunately, the negative spotlight turned on the Kardashians."

Blumenthal had actually begun an investigation into the card's fees, which run abnormally high. According to the Kard's old Web site (which seems to have been taken down), the card cost $99.95 for a year or $59.95 for six months. After that it cost $7.95 per month. By contrast, a recent Consumers Union survey of 19 prepaid cards found that activation fees tended to start at $3 and reach as high as $40.

I was among the card's first public critics, but not the only one; the chorus ranged from Blumenthal to money guru Suze Orman. When the card first launched, the card's marketers told me they hoped young adults would be drawn to the product. "There are no other better people to represent this card because of their significant fan base, especially to reach the younger audience," I was told. "Although the girls are known for spending, they are the best role models of how to save money, as well, and that is what makes them so successful with all of their personal businesses." (Reps at Mobile Resource Card, the card's issuer, did not return requests for comment this time around.)

It's one thing to manipulate grown-ups into buying lousy financial products. But kids? That's when you've gone too far. Blumenthal agreed: "This card - or kard - appears to specifically target young adults in evoking the name and image of the Kardashian family who showcase lives of luxury and extravagance," read his recent press release. "Known for their reality show - Keeping up with the Kardashians - the family is marketing a dangerous financial fantasy."

I have to give it to the sisters for backing out of this ridiculous product.

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    Farnoosh Torabi is a personal finance journalist and commentator. She is the author of the new book Psych Yourself Rich, Get the Mindset and Discipline You Need to Build Your Financial Life. Follow her at www.farnoosh.tv and on Twitter at @farnoosh.