Just how bad is this economy?
January 14, 2010
This economy is bad. How bad? Well, here’s what my clients are saying:
The economy is so bad that….
” I just got a letter pre-declining me for a credit card.”
[It came postage due]
The economy is so bad that….
” I got a check returned for insufficient funds and wondered whether the bank meant me or them.”
[Hey, where's MY bail out money?]
The economy is so bad that….
” My Congressman just got laid off by Bank of America.”
[And these guys are the last to go]
And finally, the economy is so bad that….
” Yesterday, I ordered a Big Mac and the kid at the counter asked: ” Can you afford fries what that?”
You know, I was just thinking: As bad as it is out there, it’s good to know that Mickie D. understands. I’m lovin’ it.
From “Fly on the Wall”
January 10, 2010
Back on August 5th of last year, I wrote here that the new federal credit card law would result in higher fees and charges from the Banks, designed to increase revenue in the face of the act’s more restrictive consumer protection provisions.
That prediction is now confirmed.
I got a phone call last night from a trusted source, well-placed in the banking industry, who goes by the code name “Fly- on-the Wall” in order to protect his multi-billion dollar pension.
Fly reports overhearing the following conversation between shakers and movers at the company holiday party.
Shaker: It’s rough, you know. All that heat about arriving to testify by private jet.
Mover: Not as rough as flying commercial.
Shaker: Good point. I’m just concerned that Congress might see these higher credit card fees we’re rolling out and the costlier checking accounts, as a money grab. You know, like the bail-out.
Mover: Don’t be a lunatic. These tougher consumer protection laws are going to cost us north of $50 billion annually. That’s $50 billion each and every year. You wanna explain losing that kind of swag to our shareholders.
Shaker: Well,,,um….
Mover: Me either. Listen. This isn’t about a money grab. It’s about covering higher operational costs and significantly enhanced transactional risks.
Shaker: You think they’ll buy that ?
Mover: Guaranteed. They have no idea what it means.
Shaker: I suppose more disclosure means more paper, more printing, more postage….
Mover: There you go! Disclosure costs money. Look at it this way: If we have to tell consumers exactly what they’re buying, shouldn’t they have to pay more for it?
Shaker: Absolutely. It’s added value!
My friends wonder how I do it !
September 1, 2009
Some of my friends ask me this question: “Bill, how can you sleep at night, representing all those…well….you know, people in debt….deadbeats…. really – helping them to avoid their moral obligations?”
….But not my close friends.
My answer usually goes something like this:
“I won’t lie to you. I’ve represented a deadbeat or two in my time, but I’ve been cutting way back lately. Some day I’ll quit for good”
Truth be told: Most of my clients want to pay off their legitimate debts on a reasonable repayment plan – one that suits the reality of their current circumstance – but were prevented from doing so by the absurd rigidity of the debt collectors who refuse to deal with them, demanding 24 gazillion dollars in a lump sum by Friday – or some such ridiculous number which, with late fees and over limit fees attaching well beyond the date the consumer actually called it quits on the credit card, bears little resemblance to the amount actually owed.
Oh sure, sure”" my friends say – but not my close ones, ” so these welchers whine and moan about paying their debts, while they flip channels on the two HDTV’s in each room they charged up, and laze around all day on the $10,000 tempurpedic mattress purchased on plastic that conforms to their fat butts, so they can sleep without shame.”
The Liar, Liar Files…
August 12, 2009
If you are negotiating your own settlement with a debt collector, beware of this common lie. Here’s how it goes: Let’s say the collector is seeking $5000 from you. You negotiate a 65% lump sum settlement and are pleased to get it over with for that price. The collector takes a check over the phone for $3250, and tells you that settles the case. “Can you send me something in writing?” you ask. “Sure. I’ll send something out as soon as the funds clear.”
The New Credit Card Law: Are We Really Alright?
August 5, 2009
President Obama recently signed into law a major new credit reform bill which, among other things, limits the ability of credit card issuing banks to crank up your interest rates, imposes restrictions on over-limit fees, mandates a minimum 21 days to make payment, and provides more transparency regarding payment terms and deadlines. All good.
But you don’t get something for nothing in politics, or in banking, unless you’re a CEO. So here’s the price we’ll have to pay for our new credit card protections:
RIP National Arbitration Forum. But what’s next?
August 1, 2009
The National Arbitration Forum, a Minnesota based swindle-mill, recently agreed to end its consumer arbitration scammery in response to a lawsuit by the state attorney general alleging massive consumer fraud. It seems that some of the debt collectors who relied on the NAF to render unbiased consumer arbitration awards in their favor, actually owned the company. Didn’t disclose it though. Imagine that. So after fleecing consumers for years, the NAF finally packed up and left the barn.
If you owned an Arbitration Company….
July 21, 2009
What if you owned an Arbitration company, and the purpose of your company was to resolve consumer credit card disputes. And let’s say the disputes were referred to you by banks who paid your fee. And these banks referred many millions of dollars in disputes to you, which generated millions of dollars in fees. And let’s say the consumers paid you nothing…..ever…. not a dime. And let’s say the banks liked to win – a lot – and had the option of referring cases to other companies and paying millions in fees to those companies instead of to you.
Here’s the question:
How eager would you be to kill this cash cow by finding against the banks and in favor of consumers?
[Circle the answer which best reflects your business plan]
Very eager? Somewhat eager? Not at all eager?…..
…..That’s what I thought.
The Debt Settlement Horror File
July 4, 2009
The Debt Settlement Horror file is open for business. Too many of my clients have wasted big bucks on so-called debt negotiation companies, who promise to settle your debt for 60 cents on the dollar. Sounds good, until you learn that the upfront fees and monthly account maintenance fees can amount to 40% of the total debt. That doesn’t leave much room to save money, even if they do make good on their 60% promise. And here’s a dirty little secret: some creditors won’t even talk to them. They don’t tell you that. They also don’t tell you that when you stop making your payments and start paying into your escrow account [aka settlement war chest] your creditors will very likely – if not certainly – sue you. And since these companies don’t practice law, there you are: high and dry, payin’ money for nothin’.
GOOD NEWS…from Chase Bank!
June 26, 2009
You are not going to believe this. You’ll say: ” C’mon Bill, you’re kidding right?” Not kidding. This is a true story.
I had just recently paid off some high interest credit cards. One of them, a Chase Card with a 29.9% rate, had a remaining balance of $9.25 in left over interest after I made a $1000 payment.
About a week later, a promotion from Chase arrives by mail. On the outside of the envelope, just beside the address it blares exactly this: ” GOOD NEWS! Here’s an opportunity to get a lower interest rate on your credit card purchases!”
Lower rates? I rip that open quick.
Inside, it reads:
“GOOD NEWS ! [Again]
WILLIAM ROSE, now you can get a lower purchase interest rate on your credit card from Chase in three easy steps…
1. Sign up for Automatic Payments.
2. Continue to pay on time, stay within your credit line and have no returned payments for 12 consecutive months.
3. Then watch your rate DROP to 28.24%
Drop? More like Free Fall.
28.24%. Wow!
These marketing guys are SO wired in to the American psyche.
I think I’ll close out that $9.25 balance.
Changes Coming to the FDCPA?
June 23, 2009
The National Consumer Law Center (NCLC) reports that the Federal Trade Commission (FTC) has proposed a dozen or so changes to the FDCPA, most of which would strengthen the FDCPA’s protection of consumers.
The proposed changes include:
1. Increasing from $ 1,000 to $ 2,000, the maximum statutory damage award – that is, the amount going to a winning consumer in addition to [or regardless of] actual damages.
2. Requiring disclosure that a timely written debt validation request by a consumer will suspend collection activities until the collector responds to the request.
3. Requiring a disclosure that the collector must cease contacting a consumer if the consumer requests it in writing.
4. Requiring collectors to obtain express verifiable consumer authorization before electronically dinging the consumer’s bank account for payments.
Other not so consumer-friendly proposals include:
5. Considering allowing cell phone calls if agreed to by the consumer; and,
6. Allowing email and IM contact, even though such personal contacts may not be allowed at work.
The NCLC reports that it is likely these proposals will be considered by Congress at some point, but doesn’t predict when.
