Senate Hears Bay Area Man’s Credit Card Hassles
Investigative reporter Anna Werner has done a superb report on the Chase change in terms situation. Her latest report and the preceding one are probably the most accurate I have seen to date on the issue.
CBS5 is seeking input from others in the same situation as the subject of their report, “fixed loan” borrower Tim Sauer. Consumer attorney Sturdevant is bringing a class action lawsuit against Chase with Tim as the lead plaintiff. Attorney Sturdevant testified in front of the Senate Banking Committee this week about the egregious nature of Chase’s actions. Could this be lawsuit # 10 – or is Attorney Sturdevant on one of the lawsuits we already know about?
Yesterday’s story was a followup to a story CBS5 did on February 9 -
East Bay Man’s Credit Card Bill Doubles In A Month
Please read both stories, watch the videos and contact Reporter Anna Werner. I have emailed her to inform her about this website and to tell a little of my own Chase story. I also alerted her to the fact that the monthly $10 “service fee” slapped on our accounts is a finance charge. That was the only error I saw in the report. Chase refused to answer any of Anna’s questions. They issued a statement…. from Stephanie Jacobson, no doubt!
This story is continuing to gain traction. Let’s keep the pressure on.
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on Feb 27th, 2009 at 1:44 am
Thanks for this! I just listened to James Sturdevant’s testimony before the Senate Banking Committee, and he did specifically, though briefly, mention Chase. His longer written testimony is here:
http://banking.senate.gov/public/_files/SturdevantsTestimonySenateBanking21209Final.pdf
You can view the video on line of the hearing (held Feb 12) here
http://banking.senate.gov/public/index.cfm?FuseAction=Hearings.LiveStream&Hearing_id=d8561426-8765-479e-9f0d-00c069cb3544
I found his website, but the case mentioned in the story has not been posted on the page for active cases, though there are several dealing with other credit card issuers, as well as one against Chase for mortgage payment skullduggery.
Here’s his web site
http://www.sturdevantlaw.com
on Feb 27th, 2009 at 4:07 pm
We have the same issue with Chase, 5% of the balance and $10.00 a month “service fee” on a fixed 4.99%, the primary card holder is myself. We have another Chase card (with my husband as primary) with 3.99% and neither the 5% or the service fee is being changed. What’s going on?
on Feb 27th, 2009 at 5:04 pm
Hi Marilyn,
For years, Chase and other credit card companies have failed to “make the connection” and notice individuals in the same household are often sent different information. A few years ago, we closed two of my wife’s Chase accounts because it had taken an adverse action against one of those accounts (“for no reason”), and after speaking with a supervisor, it was made clear that Chase did not care if it kept our business, or not. What remains a mystery to me, is how a company that treats people with such callousness can be among the top card issuers. So in answer to your question, for all that these banks do know, including the ability to conduct data-mining excursions into a consumer’s behavior, they apparently are clueless when it comes to word-of-mouth, and how much disgust many customers may feel when they think about particular card issuers, or the industry at large; nor do they care. Best wishes.
on Feb 27th, 2009 at 5:28 pm
Hi Marilyn,
Your situation, I think, may be a very important clue in the case against Chase. I’m one of the editors helping Dr. Lahm on this site, and I have been seeking exactly this sort of information to prove a theory of what Chase is doing, one that I think might open them up to criminal prosecution for extortion.
Basically, that Chase is using sophisticated statistical analysis methods that are commonly used in finance, to DELIBERATELY TARGET CUSTOMERS WHO THEY THINK WON’T BE ABLE TO PAY per the new terms, and thus will either default (leading to super-high APR) or who will beg to negotiate something and be told they have to accept a doubling of their APR, as many people were already pressured to do.
What does this have to do with your situation, since both accounts belong to the same people. ? I hope some of our readers who’ve worked in banking can tell me if this makes sense. Here goes:
I know I happen to have 2 credit cards from the same bank (not Chase) but they don’t have the same APR. I ask myself why. They were opened years apart and presumably APR was set in relation to whatever criteria were applied at the time.
The banks categorize their borrowers in some way, and I presume it is to put us into “tranches” just as the mortgage backed securities etc were sorted. As with those tranches, the sorting criteria would be oriented toward risk level. What individual factors would be compared I don’t know, but whatever they are, they are surely related to why I have two credit cards from the same bank with a different APR (this might involve credit to debt ratio, frequency of use of the card, even the types of things bought, or possibly as snapshot of one’s FICO score at any given moment in time – heck, even the fact that new risk analysis software was installed between the time the first and second accounts were opened.
If some people who had life of the balance offers were given increases and others not, what is the reason?
If you wouldn’t mind, can you take a look at your statements and tell me:
Do they have the same APR’s, credit limits, is one joint and the other not, when were they opened, and which one got the change in terms, size of balances, credit limit, how long ago loan was taken, how much of loan was left – anything that might indicate what Chase’s sorting criteria were.
Chase spokespersons claim that we were chosen because we’d been “carrying large balances for more than two years,” but we’ve more than proved that this isn’t the reason. One of the class action plaintiffs, Charles Clausen had only taken his loan out 3 months before he was zapped with the change in terms.
Let’s see if my theory holds any water. You are not the first person I’ve heard of who did not get an increase, but such cases are hard to find because these folks are not posting on blogs like this as a rule. I can tell you that before I received my “change in terms” I never read blogs dealing with credit card complaints.
It’s possible that some accounts were just left off by mistake, which would put this theory out the window. We simply don’t have enough data to know.
From the legal standpoint, I think, and from the court of public opinion standpoint , I know, it’s quite different to demand money from someone you think can pay, versus from someone you hope can’t. Therein lies the issue of intent necessary for the crime of extortion – to coerce someone to relinquish their property under threat of violence, or other fear of harm. In this case, to force someone to agree to doubling their APR rather than face the consequences of defaulting, including ruining one’s credit.
You can send this info confidentially through the contact area of this site, if you don’t want to post the details here.
Thanks!!!!!!!and welcome:)
on Feb 27th, 2009 at 8:04 pm
“Chase is using sophisticated statistical analysis methods that are commonly used in finance, to DELIBERATELY TARGET CUSTOMERS WHO THEY THINK WON’T BE ABLE TO PAY per the new terms, and thus will either default (leading to super-high APR) or who will beg to negotiate something and be told they have to accept a doubling of their APR, as many people were already pressured to do.”
Lyn, I have nothing to do with banking professionally, but I have no doubt that you’re right.
I watched in disbelief how they tried to trap people – changing due days to weekends or holidays, encouraging seniors with motion sickness to go on a cruise (after taking a new loan, of course), or pressing people to change a low rate student loan to their “fix rate, or “0%,” etc.
And here’s a group of survivors, who have managed to manage their finances intelligently, in spite of countless efforts to “get” them. Yes, it is a new attempt to “get” them, now, in new circumstances (including taxpayers’ money).
Frankly, I suspect that IQ in this group is higher than average.
I apologize for my linguistic imperfections, but English isn’t my 1st, 2nd, or 3rd language.
on Feb 27th, 2009 at 8:51 pm
Lyn:
I dont think Chase has any magical statistical program..the company is not that smart or business savy. Chase are just plain crooks.
They are deliberately and unlawfully suckering people in, even as we write, with low interest advances. After a few months, they play their tricks. Companies like Chase are often led by people who are not interested in building an honorable, long term institution. They are only interested in maximizing profit for the day…sort of like General Motors.Chase only believes they are mistreating a few cardholders, and they will benefit for it in the SHORT TERM. What they are not smart enough to know, is that it just is not the cardholders. It is their families, friends, employees and employers. And it isn’t just for today, its forever.
The only thing on Chases side is the bailout…but with leadership like it has, it wont take long to go through that money.
on Feb 27th, 2009 at 8:59 pm
As gratifying as it may be to believe Anna’s arrogant paranoia that I was singled out by Chase because of my genius, my wife would never buy it and she really should know.
This strawman is I think fairly easily undermined by the fact that everyone I know who has the life of balance deal as old as mine and did not go through change of terms simultaniously…has periodically used the card to charge outside the “promotional rate”
Some have been doing this with Chase for over 10 years and claim that “a bi-monthly purchase of a pack of gum” is all that is required to stave of the change of terms letter.
What I know now about this actually makes me feel like the anti-intellectual rather than the mythical construct of Anna’s post. English is my 1st language and everytime Dr. Lahm see’s me use it, he tutors me on it.
Anna’s post has made me so self aware that I will soon regress to grunting and clicking of my tongue.
(I may still try to communicate by interpretive dance while juggling flaming daschunds in my birthday suit.)
We were not identified by some sophisticated nefarious financial analysis.
It was simple vindictive retaliation for not doing what they expected us to do. We did not succumb to the temptation to use that card with it’s double digit rate.
In my case this was because I never activated it and cut it up when it arrived. I’ll bet many of the rest of you did something similar.
In this regard we are the opposite of what Chase portrays us as. We are the customers which did nothing but pay our balances down.
I am IDIOT…Hear me Roar!
on Feb 27th, 2009 at 9:35 pm
hee, hee, hee.
We’re having fun.
I think we can compare Chase to a husband who marries a girl (yes, he proposes formally, officially, correctly etc.) and a couple of months later starts to complain that his wife is sooooooo bad that she refuses to be burned, boiled, raped, etc. Probably not the best comparison, but we have to start somewhere.
on Feb 27th, 2009 at 9:37 pm
Hi Marv,
Don’t pick on Anna, I’m the one with the “paranoia” regarding the use of risk analysis to target people unlikely to be able to meet the demands. I don’t know what the facts are, but the facts are knowable. If this was done, there are people inside the Chase organization who made the decision, and gave orders to others to carry it out. But we don’t have access to inside data at this point
However, your point about making purchases outside the fixed rate is an interesting explanation, as well. That too could be proven or refuted with internal documents from Chase, but we could also explore that further by taking a survey of yes change and no change people to try to compare whether they made purchases. Could you please elaborate a bit more on what you learned in your conversations with others?
Fact is, not all people with the fixed rate loans got the change in terms. What we know, is that the public reason given by Chase is false. I want to know what is true.
on Feb 27th, 2009 at 10:49 pm
You want me to elaborate. What I know is this. I know 3 people with life of balance deals younger than mine who don’t use the cards and did exactly what I did.
They transferred large balances and set up auto-payment to avoid the penalty of rate increase due to missing a moving due date. All these people have deals less than 2 years old. None have a change of terms letter YET. All have FICO scores lower than mine.
This perplexed me so I started seaching the net. What I found is a number of episodes of systemic change in terms by Chase going back to the early days of the net. These episodes are generally defined on a thread somewhere in a message board with typically between a dozen and a hundred posts. All previous episodes involved change in terms which were not triggered by customer defaulting on the terms according to the user agreement. NONE OF THE AFFECTED PARTIES ARE USING THE CARD. This undermines the design and eliminates all margin for Chase.
What you are supposed to do is charge non-promotional items and pay down the promotional balance while the higher non-promotional balance provides Chase it’s margin and grows relatively as a constituent of the total you owe Chase. If you don’t do this, they harvest you from thier database and change terms to generate what they want or drive you away.
I only wish I had known before I got identified. I believe this is fairly elementary code which is easily thwarted based on what I have read.
In virtually every case one or more persons will post that they have been avoiding this for years by making regular. occasional small purchases.
The episodes are fairly regular, a couple years apart
Most of these threads are stale and none have the critical mass or the exact scenario that has happened to me, so since I found this site which is more similar, I have relied on it for updates on the struggle.
None of this is really too important to me now having paid them off. I am really more interested in finding out whether the law permits them to do what they are doing with regard to redefining the $10 monthly charge as a fee which they are not obliged to disclose by the truth in lending act and whether the system will permit what appears to me to be overt coersion to surrender the promised low rate after you have paid the transfer fee.
To me these seem to be clearly inconsistent with normal rulings in the adjudications I have witnessed.
Marv
on Feb 27th, 2009 at 11:08 pm
Thanks, Marv for writing that detailed explanation. Very interesting. So basically, the fixed rate loan is supposed to be a trap, because Chase has undisclosed expectations, and it intends to renege on the deal if they are not met. Seems to me that is a violation of the Truth in Lending Act for sure.
on Feb 28th, 2009 at 5:36 am
“So basically, the fixed rate loan is supposed to be a trap, because Chase has undisclosed expectations”
Lyn, of course it was a trap, and we’re punished for refusing to collaborate with well … evil. If their activities are legal, we as a society have a huge problem – absolute immorality (I am not a Republican and I am not limiting morality to bed activities only).
on Feb 28th, 2009 at 6:52 am
After I filed my complaint with OCC, the Chase contact person heard all this from me as well as something to the effect of
How can you live with yourself? Do you think you are obligated to lie and steal for your employer? Mine askes me periodically, but I refuse. I did not sell them my soul.
The Chase rep went quiet. I had to ask if she was still there. (she may have been dancing and juggling weinerdogs).
She told me that she was sorry and despite my grievance she had no power to offer anything other than the conversion to 7.99%.
I said no thanks and told her that Chase would be paid off long before the Change in terms kicked in.
She wrote me a letter telling me that she had refunded 4 months interest (a little over $300) and appologizing that she could not do more. She did not defend Chase in any way after I personalized the conversation.
I think she finally understood it was irreconcilable.
on Feb 28th, 2009 at 8:18 am
Anna wrote
“If their activities are legal, we as a society have a huge problem – absolute immorality (I am not a Republican and I am not limiting morality to bed activities only).”
I believe we do have a problem because our whole economic system is fundamentally immoral. It is one where piles of food are thrown away while people are starving. It is one where homes stand empty while people are homeless.
It is one where corrupt politicians make laws that favor Chase and other large corporations, and give them rights under law superior to those given to people. It is one where corporations poison air, land, water and living things without concern, so they can make money, and where, instead of thundering with outrage, the media is largely silent, or where they intentionally lie and obfuscate, or blame the victims because they too owe their paycheck to the same criminals, just like the Chase customer service employee.
Chase is not the only one with a business model of ripping off customers. I have found that almost everything I’ve purchased for quite some time now turns out to be a piece of junk that does not live up to its claims. I’m not a Republican, or a Democrat, and I’m very disappointed (to put it mildly) though not surprised at the efforts of the government to return things to “normal, ” a situation I call a “kleptocracy”
The whole thing is a huge, cruel ponzi scheme. Long before the “economic crisis” people like my friends ended up running up almost 50K in credit card debt (including those lovely penalty fees) to pay for health insurance for their children. There is always enough money to make war for oil, or to bail out banks, but never enough money for things that would improve the lives of most people, who are nevertheless expected to pay a whole range of taxes.
Who exactly, is this economy for?
I apologize, it was my intention to confine my comments on this site to matters related only to the Chase issue, as I know that people ripped off by Chase come from a diverse range of views, but Anna and Marv opened the door in the preceding posts, and I’m unable to control myself this morning, because I’ve been outraged and disgusted for a very long time.
on Feb 28th, 2009 at 9:00 am
Yes, I am political junkie and I’ve started a shift. I am not clear whether I should/can continue – I can very expressive in this area.
But I do have information which is tied to the main theme:
Michael Moore is working on a film which I’d call “Sicko II : Banks.”
on Feb 28th, 2009 at 9:46 am
I am an Idiot in a country full of them. It is rightful and just that we now have a government full of them. Our new President has advocated for and obtained the required congressional support for a stimulus plan which will reduce my taxes by $13 per week.
The next day he recinded tax breaks from his predecessor which had reduced my taxes by $38 per week when they went into effect. Now he has a plan to limit the deduction for home interest and charitible contributions.
He describes his plan as a tax cut. The nation of Idiots do not speak the obvious contradictions.
No, it’s not spending on a war for oil. Its much worse. There is no return. It is the raping of the wage earner (Me) without any comprehensible return whatsoever. No cheap oil, no greater national or international security, the financial markets suggest that they disbelieve and economic stimulus is forthcomming. There will be a lot of votes generated for his party by those who receive the benefits of what he takes from the wage earners.
Harry Reid gets the fastest casino train in the world and still insists that there are no earmarks/pork.
We Americans should be proud. We will lead the world to Shangri-La. Quick, now…we must scurry…the piper is pulling away.
on Feb 28th, 2009 at 10:28 am
Well, Marv, my background (a strong one) is in the humanities, including history. Naturally, I tend to understand causes and consequences, am familiar with such concepts as structure, system and systemic problems, and leave superficial understanding of reality (see, it’s raining, it’s bad) to others.
Dr anna
on Feb 28th, 2009 at 11:43 am
I am a Mycologist. 21 years ago I was a statistician recognized by my Alma Mater with it’s alumni acheivement award (1988) and the next year in Germany by the international society of process control statistics.
By this time I had tired of the work and returned to Mycology, my employer disapproved and I quit.
Before either of these careers, I managed a bank.
I know very little but in a world where most do little and complain that they can’t find work, I usually have standing offers in multiple companies/fields.
My wages are comfortable but a fraction of what the current administration claimed it would increase taxes on.
Since my taxes are increasing policy implemented in the 1st month of this president’s term, I am left with the inescapable conclusion that he is a boldfaced liar.
I assure you that in spite of my lack of doctorate I have the aptitude to comprehend this. If it troubles me, I will consult with one of the PHD’s which report to me.
I’m sure one of them will have some understanding of causes, consequences, structure and systemic problems. They will no doubt reduce it to something remedial enough for me to get my two remaining brain cells around.
(Sometimes they resort to claymation and or stick figures)
Marv
on Feb 28th, 2009 at 12:35 pm
The beauty of several years in graduate school, spent earning a doctorate, is that I learned how little any one of us can know. Secondly, while knowing is good, doing is what begets change. Presently, we are engaged in a fight that is more about “doing” than “knowing” in my humble opinion.
As I dedicate a portion of each day to combating the evil before us, I strive to execute simple tasks: correct reporters who are ignorant in calling a charge that “is a finance charge,” a fee; contact others where I can — particularly “opinion leaders” who already have an audience of some kind; contact Congressional representatives; conduct background research and write reports; try to think creatively, about ways to spread the message with “viral marketing” tools; wash, shave, rinse, brush, spit, and repeat.
It’s obvious that this site has attracted many thoughtful and intellectually interesting — if not highly engaging and provocative — thinkers. I love you all, for that.
Keep thinking, and keep commenting and sharing insights and ideas, because me must construct the truth using what we know, in light of misinformation and disparate treatment toward certain account holders, for reasons that can only be understood with certainty, within the memorandums and minds of people who work for Chase.
Meanwhile, please consider making a T-shirt; have yourself photographed, and let others in the public at large, beyond this site, know what’s on our minds as we must spread the message from “sea to shining sea.” Send the photo to your local paper or TV station.
on Feb 28th, 2009 at 1:15 pm
Marv, increasingly, I insist (only half jokingly), that scientists, particularly in this society (no knowledge, no sense of history), shouldn’t be allowed to vote.
Can you explain to me what understanding of mathematics has to do with understanding of societies where knowledge, knowledge, knowledge of facts, facts, facts, developments etc. is needed?
on Feb 28th, 2009 at 1:54 pm
About who Chase “targeted”…
Although I fit into the class of people that will be pushed into default… I really think they did not go to the trouble of isolating only those most likely to default as a result of the 5% minimum.
The explanation is really much simpler… and through an ill-prepared customer service rep… it was revealed to me:
The very first conversation I had with customer service about this change was (probably) in the first wave of customer uproar last November. That is… they were still “fishing” for the best way to answer people’s queries as to why they were reneging on their offer.
The very first thing I was told was “You never made any purchases… you were supposed to make at least one purchase per month”.
Upon pointing out that there was absolutely no mention in the terms of the offer about being required to make any purchases… the poor guy blurted out “They aren’t making enough money off of you.”
When the guy offered me the “7.99% until 2011″ option… I asked him what the rate would become after January 2011. His answer gave me a whole new insight into the way customer service reps had been prepared for this debacle: “Your balance will be paid off.” WOW! What a deal!
To be certain that I understood what he said… I repeated what I though I heard him say: If I make 24 payments of 2% of the outstanding balance… with an APR of 7.99%… my balance will be zero? His reply: “Yes… that’s the way they figured it.”
Escalate to the Stupervisor: How can 24 payments of 2% equal 100%? Admitting that I was misinformed… I repeated my question: “What happens after 24 months?” His response was that the APR would change to the Purchase rate – which is variable.
Currently at 11.49%… I said “…and by 2011 that rate could be raised to 25%?” Of course it could. “When you signed your original agreement… you agreed to agree”.
I hope by now… everyone has become aware that “you agree to agree” would not be enforced by a court. The concept is ridiculous – “I agree to agree to anything you choose to inflict upon me… although I now have absolutely no idea what that may be”.
If you’ve ever read a complicated agreement… you’ve probably read a clause similar to “Should any clause in this agreement be deemed illegal, all other clauses will remain in effect.”
People can write anything they want into a formal agreement. That in itself does not make it enforceable. Believe it or not… this is not common knowledge and credit card companies certainly know their audience.
on Feb 28th, 2009 at 2:27 pm
@Anna #12 and Lyn #14
Please read my comment “There is something fundamentally wrong…” at http://tinyurl.com/byucwc – It appears that my comment killed the thread.
From your referenced posts… I know you’ll “get it” and I’m interested in your response.
on Feb 28th, 2009 at 2:27 pm
Vito, they are criminals.
What I find sadly amusing that many people accept absolute garbage easily. We are told that CEOs deserve billions, because they have some specialized knowledge (BTW, a small percentage of professorial knowledge), have responsibilities (yeah), but …. then they demand from us that we function on their and their huge teams of corporate criminals (lawyers, managers, public relations liars, etc.) level. How is that possible?
Elizabeth Warren (professor, Harvard Law) once said that she tried to understand what “bank literature” was saying and couldn’t.
on Feb 28th, 2009 at 9:17 pm
Anna asks; (albeit only half seriously)
“Can you explain to me what understanding of mathematics has to do with understanding of societies where knowledge, knowledge, knowledge of facts, facts, facts, developments etc. is needed?”
To this I respond that every statistician understands that in any distribution exist perpetual and unrelenting forces struggling against all particular bias to return to the norm.
In all things great and small this is elemental.
Those devoid of this understanding may chose a different expression or attribute it to human foibles such as George Santayana (Poet and Philosopher) ” Those who can’t remember the past are doomed to repeat it” This application should appeal to you Dr. Anna with your omniscience of the human condition.
Perhaps Solomon’s statement in Ecclesiastes “there is no thing new under the sun, what has been will be again” was the earliest documentation of this.
The force is there. A statistician can show it to you with simple familiar objects and the time it takes to drink a starbucks.
Unlike all other disciplines which try to explain the bias in the cosmic in futile effort to control it, the mathmatician sees that it is control, steps out of the way and waits at the point he knows it will return to for the express purpose of measuring again.
This is why all significant human accomplishment has the common incubator of mathmatics. Whether the dancer knows the song or not, the music is mathmatics.
Knowlege???
Societies???
Facts???
Developments???
These are terms which seek to define eternity in a known confine. Things we ascribe these words to can appear true/valid for a time but the context they relate to is a snapshot. Mathmatics teaches us to see them as such.
As always
The Idiot
on Mar 12th, 2009 at 11:28 pm
[...] piece. Last week, CBS 5 invited affected credit card customers to their studio to follow up on her first two reports. Anna interviews this group of people who have all experienced shocking changes in terms from their [...]