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Treating customers “fairly” must be an “outdated” promise made by Chase Card Services executives.

In a comment under my post entitled, “Peggy got in a nicely aimed and delivered “direct hit” regarding the lies that Chase told in their testimony before Congress,” Cathy passed along the following information:

A representative from Chase Executive offices just called me about my email to Gordon Smith. Their position is that the statements made to Congress about Chase having an opt out program for those who do not agree with changes to their terms is outdated. They state that 2 changes have occurred since that testimony and therefore Carter Franke’s assurances do not carry forward to our claims as they were promised on a different type of account and different circumstances.

Of course, I find this twisted logic by Chase very interesting.  It does elicit a number of points that merit cross-examination.  Let’s start with a review of the testimony, the dates, the time-line, and the context.

In his capacity as Chase’s Chief Marketing Officer, Carter Franke provided testimony before the U.S. Senate Committee on Banking, Housing and Urban Affairs on January 25, 2007.  In that testimony, a discussion about “opt outs” was used to illustrate the means by which Chase worked with account holders and treated customers fairly.  With respect to context, preceding the remarks about opt outs, Franke stated:

“We appreciate our customers, and we believe our success is based on maintaining a good relationship with every one of them.”

I note that the word-choice “every” does not distinguish differences in account types.  Obviously, one of the aforementioned “2 changes” is that Chase has determined that it is not interested in maintaining a “good relationship” with 400,000 account holders who were meeting their obligations.  Rather, it has chosen to alienate those customers not only by virtue of changing “fixed APR Until the balance is paid in full” loan terms, it also decided to defame those customers through disseminating a negative portrayal of affected account holders in the media.

Franke also stated:

“Our objective is to establish long-term relationships with students so they will continue to do business with us all their lives.”

I mention this because as I have explained elsewhere, with some obvious exceptions such as my mortgage and a vehicle loan, my personal credit obligations are primarily associated with my decision to go to graduate school, so as to become academically qualified to teach.  I wanted to serve and help others.

As I gradually claw my way out of debt as a result of pursuing what I considered to be a long-term and worthy objective (as compared to “shopping” or some other frivolous behavior), I would observe that Chase has failed miserably in meeting its stated objective relative to maintaining a life-long relationship with me, speaking as a former student.  As an entrepreneurship professor, now, I am responsible for interweaving a message of ethical behavior in all of my courses (the Chase behavior certainly makes for a great “textbook case study“).  Further, you can “bet your sweet bippy!” that I also warn students about the dangers of using credit cards both as consumers, and as a source of capital for small businesses.

Franke also stated:

The importance of customer relationships is a key driver of many of our business decisions. For example, a missed payment on a non-Chase card does not result in an automatic re-pricing of any Chase account.

Obviously, this is another one of the “2 changes” mentioned in Cathy’s comment, above.  Clearly, customer relationships are no longer a “key driver” in Chase’s business decisions (if it ever was in the first place, recalling that well before the date of the testimony, a Chase supervisor expressed no interest whatsoever in maintaining a relationship with my wife, after Chase took an adverse action against her “for no reason”).  I also have not seen any evidence that Chase isn’t re-pricing cards based on any excuse it can conjure up (and further, according to some posts I have seen on the Internet, it is apparently pulling other “stunts” such as manipulating billing statement due dates so as to “help” people miss a payment).

Now, as for the “opt out” passage, Franke stated:

“We deal with them [customers] fairly and responsibly….we provide that customer with an “opt out” option.  This means that the customer may reject any change in terms, close their account, and pay off the balance under their existing terms.  We believe the vast majority of our customers feel they are being treated fairly.”

On March 7, 2007, Richard Srednicki (the former CEO of Chase Card Services until he was replaced by Gordon Smith), delivered very similar testimony before the U.S. Senate Permanent Subcommittee on Investigations.  About 10 months passed in 2007, and 11 months passed in 2008 before Chase imposed its change in terms to the contrary.

Hence, the life expectancy of Chase executives’ assurances appears to be under two years.  Regular readers of the ChangeInTerms.com site will also recall that coincidentally, Chase “desired” to be paid back in about two years (something it never bothered to tell customers when it was promoting its “life of the balance” loans).

In light of the new “spin” in the Chase Executive Office’s position as noted in Cathy’s comment (also demonstrating that Chase has no moral compass), the statement that “We deal with them fairly and responsibly” reflects yet another change.  Accordingly, new testimony, if it was delivered honestly (apparently not among the list of needed leadership competencies to be a Chase executive), would state:

We previously claimed to deal with customers (but we meant only some account types) fairly and responsibly when we sat with a straight-faced and lied before Congress, but a key driver in our business decisions is now short-term profits for our executive perks and bonuses.  We also want to raise capital for buying the distressed assets of other banks (like Wa Mu) by accepting bail out money and squeezing customers.

That old “fairness” thing?  It’s really been discarded as a useless anchor holding us back at Chase — totally outdated.  No more opt outs.  We bully the customers and give them no choice in the matter whatsoever.  Everyone knows the life of our testimony is about the same as our “life of the balance loans” — until we change our minds and change the terms.

Would you like to know what else has also changed?  Carter Franke’s testimony also stated:

This is an extremely competitive industry, and customers have many attractive credit card offers to choose from.

Have you noticed that the industry is for all intents and purposes no longer competitive?  Rather, it is run more like a cartel (humm, gas prices in my area: $1.99, $1.99, $1.98; balance transfer fee: 3% no maximum, 3% no maximum, 4% no maximum — new for B of A)?

No, you really don’t have an “opt out” choice with Chase — “fairness” is dead.  And, you are really going to be pushed around, trapped like a surrounded victim in a circle of muggers.  Lacking any other “attractive credit card offers to choose from,” recently, you can now count on being assaulted by group of lying executives and their lobbyists who control an unfettered credit card industry where the “largest 12 issuers…control more than 88 percent of all outstanding credit card debt in America.”

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