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Contracts written by credit card companies are bad faith agreements, which seems to be alright with anyone who is able to “pay cash.”

A September 14, 2009 article by Arthur Delaney of the Huffington Post entitled “Debtor’s Revolt: Woman Refuses To Pay Off Bank Of America Credit Card (VIDEO),” features a customer, Ann Minch, who is finally “fed up.”  As per the article title, Ms. Minch is calling for a rejection of the credit card company’s tactic of radically raising interest rates (especially while banks have also been receiving taxpayers’ bail out money).

Apparently, her video, “DEBTORS REVOLT BEGINS NOW!,” is drawing a lot of attention on the Internet.  According to Mr. Delaney, the video (released on September 8, 2009) had received “96,000 views as of Monday morning [September 14]”; in checking just now, the site reports 175,023 views (it was 151,204 yesterday, when I started composing this post!):

Not surprisingly, with that kind of trajectory in viewership, comments have also been robust.  Many are supportive, and many are not.  Since I have this blog as a platform, obviously, this post is my primary place for adding my own “comment.”

First of all, I personally have not taken the same approach in refusing to pay (actually, her refusal appears to be “unless she was offered a lower rate,” which was raised to 30 percent as of July).  I do think 30% is obscene (in the questioning period after my testimony before Congress I remarked along the lines of “how high did interest rates need to go before everyone agreed that it was legalized loan-sharking…40%, higher?”).

I do understand that such a refusal as has been pursued by Ms. Minch may appear to be the “biggest stick” that an individual borrower may have if he or she feels that it is impossible to negotiate any other way in the face of interest rate or minimum payment hikes.  I am not a lawyer, so I can’t really advise someone one way or another in taking such an approach.  However, I can say that generally, “it depends” (on the value of one’s assets, his or her credit rating or concern for that rating, and other circumstances).

Notwithstanding the above, relative to her premise — starting a revolution — I agree that fighting back is necessary.  (Respectfully, she claims that hers is “the proverbial first shot fired in an American debtors’ revolution,” but she is not the first — consumer advocates and others have been fighting this battle for years.)  Nevertheless, how or even if one chooses to fight back is matter of heated debate (judging by comments under her videos).

The site has predominantly featured Chase since I began actively blogging here, but as you will note, “the cause” is ending the abusive treatment of customers by the credit card industry at large, and I have long been against that abusiveness.  I think that fighting back is best approached using well researched information, along with technologies to disseminate anti-marketing messages (obviously, a viral video is one such technology, regardless of how one feels about the negotiation tactic that Ms. Minch has decided to employ).

In reading some of the negative comments, I found myself saddened.  Numerous remarks were personal attacks against this individual, accusing her of buying cosmetics, or whatever (the point was, according to the comments, that she borrowed money frivolously and she shouldn’t have done that — time to pay the price).

What made me sad was that it’s hard for me to stomach some of the negative comments underneath a video like this.  Many people seem to assume that anyone in debt has gotten in that position because they were frivolous, or stupid (“read your contract”).  These individuals who make such assumptions about “read your contract” completely ignore, however, other tenets under the law, especially “bad faith” versus “good faith.”

The contracts written by credit card companies are bad faith agreements, which seems to be alright with anyone who is able to “pay cash.”  What is interesting to me, is that many of these holier than though individuals passing judgment would “holler to high heaven,” if they were on the receiving end of a bad faith contract themselves.  What are other “bad faith” contract examples?

How about the nightmare stories concerning home improvements (when jobs go bad, or are not completed)?  Let those “paid cash for my home” buyers get into one of those bad faith deals, and they’d scream, too.  The mechanic “said” your transmission was rebuilt, but a minor repair was made, instead (because that was all that was really needed: again, “bad faith”).

I could go on and on…but if “screwing the other person over is fine, as long as you don’t do do it to me” is the mentality out there, what a merciless, horrible future, we face.  Our unsuspecting children will have it even worse, and eventually they will learn to lie, cheat, steal, and otherwise be “out to get the other person, before he or she gets me.”  What a vicious downward spiral.

I would venture to guess that 99% of the “read your contract” folks slept through the part about the necessity for good faith that underpins all contractual agreements in whatever business law class they may have taken (if they took one at all).  For that matter, the “rule of law” itself means nothing, to individuals or a citizenry at large in the situation under which laws apply, when the intent of parties is to willfully act in bad faith.

What really frustrates me, is questioning my own life in the face of such mean-spirited, presumptuous, holier than thou “don’t spend what you don’t have” remarks.  It’s not my video, but I (too) spent money “I did not have.”  I get the feeling that these critical individuals who are passing judgment, would not care that I did so going to graduate school, so that I could be academically qualified to teach.  I wanted to try to help people, and I have.  Thus, I question myself: “But at what cost?”

The comments from those who “do have” (apparently some have a whole lot — they even think that beyond credit cards, people should have no debt, not even a mortgage — must be fabulous, buying houses for cash) really hurt.  Some were laden with expletives and made me feel like anyone who is in debt, for any reason, is scorned.  They really are merciless, barbaric, Roman Emperor “thumbs down” callous; many are not even civil to one another.  If comments like that come to this blog, I do not want them.  We can all disagree, but I’m not interested in a brawl.

Did I make a mistake, going to graduate school?  Well, it was certainly a financial mistake.  Did I make a mistake, thinking I could make a difference by teaching?  I don’t think so.  Not every student is going to like every professor, or learn, but most seem to learn from what I provide in the classroom (or on my faculty site, et cetera).  Am I sorry I borrowed money to go to graduate school?  Absolutely, yes.

Could I have gone to graduate school without borrowing money?  I would have been too old to teach, if I waited and saved enough to “pay cash.”

Would I live my life differently, if I had it to do over again?  I would not change some things:

I’m far from perfect, and I’ve certainly made mistakes, but I’ve always done the best I could;

I pay my bills on time and meet my obligations;

I’m a good citizen: I pay my taxes, although I’m very concerned that government is spending “our money” on the wrong things at the wrong time, and at levels that are beyond all of our means (for example, see my previous article, “A low cost ‘2-3-4’ assumable step-loan program would have prevented much of what has ailed us and what will be ailing us for decades“);

I earn an honest living: I don’t wake up each morning trying to think of ways to screw people over (like many credit card companies do); instead, I try to help them;

I am a hard worker;

I take pride in maintaining my home and I take care of what I do have;

I was a very good student, in graduate school;

I have been completely faithful to my wife (I do tell “wife jokes” on occasion…but wives, including mine, tell “husband jokes,” too); I love my wife and my children;

I am a person of faith (but I do not believe that is my right to judge others in their faith, or any lack thereof);

I accept other people (and their individual and cultural perspectives — indeed, I love learning about these);

When I am gone I will leave what I hope will be pleasant “memories” for some whose paths in life have crossed my own;

My writings, art, and photographs (as forms of expression) may be seen as a contribution, by somebody.

Meanwhile, the other thing that really hurts is the selfishness and ignorance suggested by some comments under the aforementioned video.  When I say “ignorance,” I mean the inability to think (apparently) about the interconnectedness of it all, beyond individuals, consumers and what they buy using credit cards.

This is not strictly a consumer or consumption issue.  It’s a lot of interrelated concerns that are at stake here: “fairness,” whatever that is ultimately defined to be (in consideration of usury), being the biggest one.   Political processes and corruption (credit card industry lobbyists having more influence that “we the people” — millions upon millions of credit card holders) is also a major issue.  This is especially exacerbated with the media too afraid to engage in real journalism because of the threat of lost ad revenues, so they make these things a “last page” mention (or ignore them).  (I have not seen one hard hard-hitting story about the Congressional testimony delivered by Chase executives who used opt outs to describe the means by which customers were treated fairly, yet Chase turned right around and refused to provide an opt out with its infamous 5% — payment-jacking — change in terms.)

I am also referring to issues related to the economy, which is especially in need of nurturing small businesses (the vast majority of which are started by entrepreneurial “bootstrapping,” and may very likely entail using HELOCs, credit cards, and/or other non-traditional sources of capital).

Importantly, bootstrapping, including using credit cards to start businesses has been done successfully.  I would offer Google as a bootstrapping start-up example, a company that has gone on to generate wealth and employment for thousands.

Now, I am not saying that start-ups should use credit cards; rather, I am merely pointing out that they do use credit cards.  And they do so in very large numbers.  Sometimes it works, and sometimes it doesn’t, but entrepreneurs are typically passionate people who are driven to try (there are so many obstacles, they need to be).  Furthermore, without the successful efforts of some who do make it, civilization as we know it would not exist (if you’re reading this on a computer, thank many entrepreneurs who each played a part in bringing that computer to market).

And yes, I acknowledge that it would be nice to “save up” and “pay cash” to start a business (buy a house or a car, or go to graduate school).  Unfortunately, in many instances, it would be too late; i.e., with entrepreneurship, it can be the case that an opportunity or market that isn’t seized promptly, is lost permanently.

Despite this present post, or all of the site’s content, there apparently will always be comments by dismissive, naive, selfish individuals who either cannot or will not grasp the issues.  Have I make a mistake, fighting the abusive treatment of customers by credit card companies (again, I have asked myself)?  I’ve outlined who I am and what I believe in, and I don’t think so.