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 ChangeInTerms.com 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 ChangeInTerms.com 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.
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on Sep 16th, 2009 at 5:50 pm
Bless you, Dr. Lahm, for this call to civility in public discourse! I, too, have been quite disheartened by the types of posts to articles about this issue put out by the mainstream media. Typically, these articles do not pose the issue in a manner that invites impartial responses. Rather, they are meant to pit the “have’s” against the “have not’s”. I have been following this issue doggedly and I have attempted to interject what I hope are balanced comments, whenever possible. Unfortunately, I have repeatedly had my comments removed from CNN, ABC, etc. I do not consider myself unduly vehement or abusive when expressing myself. Therefore, I have come to the conclusion that the “debate” is a controlled one.
Gosh, I would like to be proved wrong. However, an item posted in the New York Post, just a week ago, declared JP Morgan Chase Bank to be the nation’s largest publisher. It would, therefore, not be a leap of logic to suspect that a percentage of the posts are from astroturfers. You will notice that the tendency is to jump on the consumer, and give the bank institutions, who are still gambling by loaning out money (THEY DON’T HAVE!), a total pass. The amount of intense speculation and deficit spending by the banks is ongoing to the detriment of the American economy, yet these people think we got there because a group of people bought too many Italian shoes!?! Give me a break! Therefore, their opinions should be given little weight because they are one or a combination of the following: 1) ignorant 2) paid trolls 3) insensitive, uncaring, unimaginative individuals.
Bearing that in mind, I will not allow myself to be dissuaded from getting the word out. One can only hope that, in time, some people may choose to follow the more balanced and courteous examples.
On the topic of usury, I was bemused by the fact that while a majority of representatives voted FOR the “Credit Card Reform Act”, most of them also voted AGAINST a national interest rate cap. By this action, and by allowing several loopholes in the legislation, our representatives left consumers still vulnerable to abuse by the banks, in 2010. While some may argue that an interest rate cap is against free market principles, there certainly was an opportunity for Congress to build in safeguards to prevent a consumer’s interest rate from leaping to 30%, rather than increasing their rate, in phases. (Please correct me, if I am wrong, but it is my understanding that the new law allows this.) There is a provision that the credit card holder must be restored to the original rate after a period of paying on time. I support free market principles, but I also believe in abiding by fair contracts and a level playing field for all parties involved.
I see a lot of posts, querying “isn’t 30% illegal” and “what about state usury laws?” If consumers knew how their protections had been eroded over the years, due to special interest lobbying, in the name of the “free market” they would (or should) be absolutely appalled. “Free” – for whom?
on Sep 16th, 2009 at 7:06 pm
Dear “M,”
As you have pointed out, there are plenty of loopholes in the C.A.R.D. Act, and these are clearly designed as a political compromise by Congress (whose members “work for” the banks that send them money — along with lobbyists in many other industries, such as health care and pharmaceutical companies).
There are plenty of areas where rates are set and services are delivered for the common good; public utilities are a prime example. The Federal Reserve Act gave the power to control money to an organization that sounds “federal” as though it was part of our government, yet its “ownership” is represented as “shares” by the big (national) banks. It “ain’t ‘federal,’ it’s a cartel.”
Unfortunately, the states also lost most of their power to invoke laws and regulations as a form of local control or response to the “national” banks under the “‘federal’ reserve” (lower case intentional) system.
Last but not least, for the most part, banks aren’t doing things that are “illegal,” as they have been freely operating as tyrants have always done, such as in the “wild west,” when whole towns were taken over by a single individual who struck it rich in cattle, oil, or gold, or railroads: they own the “police.”
The banks, in effect, “own the OCC*,” and as was demonstrated by the votes you cite “For” or “Against” consumer protection with respect to usury, they (via their powerful lobbyists, spreading cash and contributions around), “own” Congress.
There is nothing “fair” about any contract, even if it is written as one that appears to be fair, if either or both parties are dead-set on acting in bad faith. The C.A.R.D. Act did nothing to remedy that situation, notably because Congress itself acted in bad faith: Its members are paid by lobbyists, but elected by citizens whose interests are supposedly to be represented.
The will of the people is consequently undermined by Congressional members who are claiming to work “for the people,” but are in fact working for industries and interests (which are represented by the lobbyists). Bad faith and corruption eventually permeates all aspects of a society as it is falling, and in my opinion we are free-falling, now. That, is the underlying reason that I am fighting: for my children and their future. I hope that they can live meaningful lives in a civil, and just, society.
* I have previously written that one goal I had was to prove that the OCC was not relevant as a source of “regulation,” or protection for consumers (which it has since done for itself by its complete and utter failure to do anything besides constantly responding that banks can do anything that they want — the New York Attorney General’s Office is the only one that drew a line in the sand with Chase and said that what it was doing was wrong and unacceptable; did the OCC do that? No. The OCC is not relevant and should be decommissioned (or gutted and restructured).
on Sep 16th, 2009 at 8:52 pm
Dr. Lahm..you have nothing to apologize for or feel bad about.
In my life, I have dealt with mostly the “haves”. They do not understand what it is like to no have a dollar for a cup of coffee. They cannot fathom not having money to buy the essentials. It is not that they are stupid, they just dont know. I have a friend who does not understand why I dont take a vacation every month…he does.
So keep up the fight….it is one for fairness, decency and honesty.
on Sep 16th, 2009 at 10:07 pm
Gosh, I could mirror my life experiences with Bob’s, except I spent money on professional video equipment. I vowed that whatever video job I did, I wanted it to be of such quality that people might call me ten years later asking for copies on whatever new video format would replace VHS, and that the quality and craftsmenship would stand the test of time.
Guess what, it’s happening. I’m getting calls from people that I made video masters for TEN TO 12 YEARS AGO wanting them transfered to DVD! I’m blown away at how good the professional gear I used respectfully back then, holds up even today. But I have paid a huge financial price as well.
Yet, I too have such incredible experience in the editing room and from camera work I did during the 90’s and earlier this decade and that knowledge continues to propel me forward. I never once used my credit card expenses on frivolity, cars, vacations, nor internet porn.
To my surprise, one thing that has held me back were some of the people that I considered role models, brilliant people who ran their own businesses, who in some instances I did some amazingly good work for for way below what it really should have cost, who have never looked back and thought of a way to help boost me forward, even as I did certain projects for them that helped propel them forward.
I’ve had situations where a client may have blown a couple of grand buying drinks for crowds of people in bar, then they watch every dollar they spent in my studio as if it were their last nickle. lol, maybe it was.
I’ve had people who were offered television broadcast jobs specifically after viewing editing work i did on their behalf, only to see them refuse the broadcast offers, resulting in my not being able to put their career path success on my own resume.
What do we call people who pay their way, but then don’t follow all the way through on projects that you helped create momentum for?
There are other forms of debtors out there, and in many instances their imperfections have affected our own path to success, so I can’t take anyone who judges me too harshly, very seriously, instead, I just avoid them, and that is their loss, and my gain.
on Sep 16th, 2009 at 10:50 pm
Most important of all, if you have a bit of time, go to the debtors revolt Youtube video and respond to the dum dum commenters that seem to be oblivious to the primary complaint of the video, which is that 30% interest rate, even 23.99% interest rate, IS USURY AND IT IS ROBBERY AS WELL.
on Sep 17th, 2009 at 10:43 am
Regarding the Federal Reserve, HR 1207 appears likely to pass the House, but S 604, “The Federal Reserve Sunshine Act of 2009″ faces an uphill battle in the Senate. Here is a list of sponsors:
The 25 co-sponsors, 19 republicans and 6 democrats:
John Barrasso [R-WY]
Robert Bennett [R-UT]
Samuel Brownback [R-KS]
Richard Burr [R-NC]
Benjamin Cardin [D-MD]
Saxby Chambliss [R-GA]
Thomas Coburn [R-OK]
John Cornyn [R-TX]
Michael Crapo [R-ID]
Jim DeMint [R-SC]
Byron Dorgan [D-ND]
Russell Feingold [D-WI]
Lindsey Graham [R-SC]
Charles Grassley [R-IA]
Thomas Harkin [D-IA]
Orrin Hatch [R-UT]
Kay Hutchison [R-TX]
James Inhofe [R-OK]
John Isakson [R-GA]
Blanche Lincoln [D-AR]
John McCain [R-AZ]
Lisa Murkowski [R-AK]
James Risch [R-ID]
David Vitter [R-LA]
Jim Webb [D-VA]
I, for one, would like to know what the Fed has been up to.
on Sep 17th, 2009 at 6:24 pm
I am listing two links from the anonymous banker web site. One is a rather long article that explains the TALF program. I find these types of articles fascinating. Others may not. In any event, this is why I fume when I see news articles with comments praising Jamie Dimon/Chase Bank for paying back TARP funds. It is all one big shell game at our expense. One can only speculate why journalists seem unwilling to ask hard questions of responsible parties and to explain the current financial debacle to the American public in terms they can understand. Possibly, the journalists don’t understand, as well. Incidentally, when you see references to the Federal Reserve Bank of New York (FRBNY), remember that Jamie Dimon of Chase Bank is on the Board of Directors. The anonymous banker refers to a clear conflict of interest between TALF, JP Morgan Chase, and Trepp LLC.
http://anonymousbanker.com/?page_id=45
The other link has similar elements to the “Debtor’s Revolt” video. The article is Anonymous Banker’s Fantasy on how to lower credit card rates. It refers to a Boston Legal episode, entitled “Legal Deficits” from Season 2, Episode 10, broadcast on December 13, 2005.
http://anonymousbanker.com/?p=393
on Sep 17th, 2009 at 11:41 pm
I found your site recently while searching for dirt on Chase. As someone who is very concerned with corporate abuse of consumers, I think it is an important and laudable thing you are doing, something all too rare. After reading this particular post I have even more respect for your position and your efforts.
Unfortunately, the society we live in is conditioned–purposefully–to accept corporate dominance with little questioning. The vicious ignorance which spews forth at those who stand up and fight the injustice displays how insidious and pervasive the culture of subjugation is within the American psyche.
Sympathizers with this site may be thoroughly aware of the immorality with which financial institutions operate themselves, but perhaps not realize that this immorality is common to corporations in ALL industries. While it is extremely difficult to keep up on all the horrible ways in which consumers are taken advantage of by large companies, I encourage everybody to arm themselves to the extent that they can with knowledge and information in all arenas of commerce.
To give merely one specific example, food corporations regularly use hydrogenated oils and high fructose corn syrup (HFCS) in just about everything–check the ingredient lists of things you regularly buy. These two ingredients have been scientifically proven for years and years to eventually cause, yes actually CAUSE, cancer and diabetes, respectfully. Yet they are still omnipresent because they are a very cheap way to get around using higher quality ingredients. Companies are literally, physically KILLING uninformed consumers who blindly trust that the food they buy is safe. In addition, HFCS is used because it suppresses the body’s normal functions which indicate to us that we are “full”, making us want to consume more. Unfortunately, there are many ingredients like these in consumable products.
Stay vigilant my friends, because we do not live in a country where those in control are concerned with either the present or the future of its citizens, as long as they can still suck money from our veins.
on Sep 19th, 2009 at 3:47 pm
I have to say that I felt similarly when I watched the “Debtors Revolt” Video. I went to grad school, used credit cards to start up a business, etc. This is nothing I should feel shame about and really do not understand all of the…can’t pay cash…you shouldn’t buy it comments.
I am now wondering if there is anyway to sue these companies for personal damages because of how their actions have negatively impacted my credit score. I did not do anything to ruin my credit score…no late payments, no closed accounts, no over extension of credit lines…etc….
Yet my personal credit rating suffered as a result of their banking decisions when they closed unused accounts and lowered credit limits.
I paid off Chase by the way on September 15th. I have balance transfer checks sitting on my table for .99%. I am refusing to use them to pay off Citibank on principle alone. I don’t care if they sent me an “I am so sorry we made a mistake by blackmailing you letter in April”.
We must do our best to have fair consumer laws passed to regulate this industry.
on Sep 19th, 2009 at 5:28 pm
I’d like to point out that Heather H (comment 9, above) has created her own blog, with a very compelling letter to Citibank as its first post. I have commented under that post on Heather’s own site, but the summary here is that I am touched by what she (and her husband) had to say, and we evidently share the same “moral compass” (whereas banking industry executives, obviously do not).
Please visit and support her link:
http://consumedbydebt.blogspot.com/2009/09/open-letter-to-citibank.html
on Sep 20th, 2009 at 12:54 pm
Chase has been completely inconsistent in dealing with the victims that have actually managed to get past the first level Customer Service Representatives. The mind games and the additional psychological trauma that they are subjecting these people to are truly insidious:
1) Upon first contact with Customer Service, Chase does not initially offer any kind of deal – the customers are told they are stuck with it.
2) If a customer insists on speaking to a supervisor, Chase offers to restore the 2% minimum payment, with an increase in APR, sometimes 7.99%, sometimes higher. This APR is only good for a year, followed by an increase to the “going rate” of 20% plus – not much of a deal.
3) If a customer gets a hold of some “inside information” such as the possibility of a “hardship” or “proactive solutions” department, they are either told no such department exists or reluctantly transferred to the department.
4) If a customer gets a hold of the number for one of the “non-existent” departments from one of the protest blogs (877-890-2941 or 800-404-6220) and calls in, they are subjected to a humiliating review of their personal income and finances to see if they “qualify”. Some people have managed to get a five year, fixed payment deal, at a low APR, some have been offered the deal at a higher APR.
5) In order to “qualify” the customer must consent to A) closing their account and B) giving Chase bank electronic access to their checking account for automatic payment withdrawals, for the first few payments. The customer has to accept these conditions, whether they have been notified of approval or not.
6) Some people have gotten off the phone, with the impression that they have a deal, only to be told days later that they don’t qualify.
7) The customers who have been accepted have to sit around for weeks, waiting for the written confirmation of their “deal” and wondering what the terms really are. Obviously, nobody trusts Chase to work in good faith. How utterly nerve wracking!
Wait, it gets worse – Some of the customers have stated that, despite their being rejected for the “deal”, their credit lines get cut or closed, their interest rates raised, and their FICO scores trashed – All because they confided their personal financial information to Chase, in desperation for some assistance. Some customers have even said that Chase has initiated the electronic debiting of their accounts, even though they were rejected for the plan!
Regarding some claims about the five year, fixed payment loan, I have been unable to find out if the new plan is a conversion to a secured loan and whether the majority of interest is paid up front. I have posted these questions on the blog sites, but everybody is so upset about their lives being turned upside down, I haven’t had any responses. I am not willing to participate in Chase’s social experiment, in order to find out.
Lastly, if anybody goes to the following link, please see posts 447 and 567:
http://credit.about.com/b/2009/06/26/chase-increases-minimum-payment-on-credit-card-balances.htm
I think the person who posted #567 might have called Toni at Gerald Smith’s office, listed in post #447. It is not clear. What is truly despicable is what Chase put this person (whose moniker is “Sleepless”) through. In addition, the latest posts imply that Chase may not even be offering to reduce customers to a 2% minimum payment, any more! Clearly, some cold blooded SOB has analyzed the numbers and decided it is no longer in Chase’s best interests to negotiate with its customers.
I am sorry for the extremely long post, but I want to spare others from being subjected to the unbelievable abuse these evil institutions are heaping upon the American public. I am not using the word “evil” in a petulant manner. I could not help but come to this conclusion, after observing the effect of their actions on hard working Americans.
on Sep 20th, 2009 at 10:46 pm
I am curious to know… has everybody filed complaints with http://www.consumeraffairs.com ? They regularly file class action lawsuits based on complaints they receive.
on Nov 1st, 2009 at 10:45 pm
[...] have impaled any semblance of honor and exposed your true nature as an organization that acted in bad faith, and now wants to get away with it. But you [...]