Besides credit card customer abuses, impacting both consumer and small businesses, Chase is also still at the top of my own personal list of the most egregious abusers in the mortgage arena.  Because practically every other commercial aired on TV news channels seems to be from Chase, I don’t think it’s much of a leap to assert that the financial incentive its advertising schedule provides likely has an impact on what news coverage we do and do not see.  I think Chase’s advertising dollars have certainly had an influence in a tendency toward “buying off” the mainstream media.

As an example, I have only seen barely a smidgen of CNN coverage on what Chase did to military families.  In case you’ve already forgotten (for lack of coverage), I have not.  Moreover, foreclosing on ANY of them, and overcharging thousands of them was horrible.  Don’t you get it Chase?  We’re not accounts, we’re human beings.  Meanwhile, if I watch CNN for an hour or two, it repeats some stories over and over and over again in that same time-frame.  But on the day I saw a mention of Chase’s foreclosure story on military families, the story seemed to be very short, and I did not see it repeated again at all (which was glaringly noticeable given the typical incessantly repetitive style of CNN coverage I have observed).  Humm, go figure.  Time’s up.  The answer is obvious.  No media outlet is going to mess with one of its major advertisers.

My father (now deceased) was a fighter pilot and served his country honorably until his retirement as a Lieutenant Colonel.  As a small child, I remember his deployment in the Middle East.  In fact, my mom recently gave me a box that made me cry.  It was filled with military pins, patches, postcards from foreign countries, his Air Force gloves, and other reminders of his life and mine.  These military memorabilia from my dad also made me think of Chase.  I don’t think that Chase has exhibited the one value that is needed to justify its continuation as an institution: honor.  What Chase did to these military families turns my stomach.

I receive a number of subscriptions to newsletters and notices from consumer organizations.  One of these is from “Showdown in America,” which is organizing “two days of direct action on J.P. Morgan Chase and others” in Ohio on May 16 to 17, 2011.  It has also been helping to promote this video, by PICO National Network, and I am proud to do the same:

Click here to view the embedded video.

In other news, Bank of America, you’re “on my list,” too.  You’d better recognize that when you send change-in-terms notices to me (four recently), I will read them.  I’ll be getting back to you on that.

© Dr Robert Lahm for ChangeinTerms.com, 2011. | Permalink | 5 comments | Add to del.icio.us
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Here’s a little background information.  If you are familiar with this blog, then you already know that I am employed as an entrepreneurship professor at Western Carolina University.  I’ve been researching the use of credit cards by small businesses, entrepreneurial bootstrapping (starting a business from scratch with little or no capital), and similar topics in connection with scholarly writing for a number of years.  I am not a life-long academic, however (and “bootstrapping” is something I have done myself in the past, in the course of starting my own former businesses).

Remember the C.A.R.D. ACT?  You know, the one with loopholes that are “big enough to drive an armored truck through“?  The one that the credit card companies spent millions to lobby against (using as one source of funds, taxpayer’s own bailout money)?  The one that applies to fixed rate consumer cards, but exempted “business credit cards“  and variable rate cards (see the “loopholes” link cited above — credit card companies conveniently used the incredibly long waiting period before the C.A.R.D. Act kicked in to convert accounts to variable rates)?

Who does Congress think it’s fooling?  The banking industry “influenced” Congress to write the C.A.R.D. Act in such a way as to create the image of a victory for consumers (thanks to its largess and “concern for the commoners”).  Unfortunately, what our representatives really did was to draft and pass legislation with all the room the industry needed to wiggle out of giving consumers (and small businesses) the one thing they really needed: protection from a bunch of abusive bullies who to this day, have not changed their ways.  It’s still all about the bonuses!

Now, focusing on the topic of small business and professional credit cards, the aforementioned Wall Street Journal reporter whom I was speaking today (Jessica Silver-Greenberg) asked me to try to help her find some living examples of individuals who have been “switched” (either knowingly or without really being informed as to what the switcheroo was all about) from a consumer card to a business or professional card.  She subsequently emailed the following to me:

It was great to speak with you.  If you could post the following on your website, that would be fantastic.

So, I am looking for any one who has received a solicitation for a small business or professional card in the past year. I am interested particularly in cardholders who have been approached by credit card companies, either  by mail or by phone to switch into a professional/small business card from a personal credit card.

If you could post that on your blog, and tell anyone interested to email me at Jessica.silver-greenberg@wsj.com that would be wonderful.

Thank you so much.

Jessica

(Of course I will post it, Jessica — as long as credit card companies play “bait and switch,” I am delighted to do so.)  Although Jessica has offered her email address directly, I would be happy to forward anything to her on behalf of ChangeInTerms.com readers (and, I’d actually like to hear from you myself, if you respond to the request; comments are welcome below this post as well).

© Dr Robert Lahm for ChangeinTerms.com, 2010. | Permalink | 4 comments | Add to del.icio.us
Post tags: credit, credit cards, small business

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So what was my “anniversary post” to be?  It’s not like I forgot the anniversary itself.  It was the day I opened my mail and read in sickening disbelief the change in terms notice that Chase sent to me.  On December 3, 2008 I responded.

I won’t forget.

No matter how much advertising Chase can buy, thereby suppressing the truth about its unethical actions in the mainstream media, I won’t let Chase forget, either.

I have plenty to do at work right now (it’s final exam week).  However, rest assured that I’ve been “making my list and checking it twice,” and I know all too well that banks and their lobbyists  have been very, very naughty, and not at all nice.  The popular uproar continues, while the the back-room negotiations with “our” elected officials continue to feed “fat cat” bankers at the expense of small businesses, taxpayers, the economy, you, my family, and me.  I’ll have more to say on all of these things.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 11 comments | Add to del.icio.us
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(NOTE: If needed for republishing, click for a larger/higher quality image.)

I had visions of immediately firing off a press release with some discussion, but I find myself a bit distracted by a matter that has arisen: another rock slide.  As regular readers know, I commute (because my house has not sold) from Tennessee to North Carolina, and back, each week to meet my employment obligations as an entrepreneurship professor.

As I mentioned in my post on October 25 (a few weeks ago), my drive got harder after a rock slide closed I-40 near the TN/NC border; it is predicted that this passage through the mountains will be blocked for months.  I subsequently found a new, more difficult, southern route around (through Chattanooga and then winding roads, including traveling through two national parks).  Well, evidently, Mother Nature doesn’t want me to use the alternate route either (a portion of which can be seen in the video below — it’s gorgeous, but a hard way to get to work):

This link provides more context than the YouTube video above: workers were already on site removing one large rock, and a news crew was filming that event when even more came down.

P.S. Don’t worry Chase, I’ll be able to make it to work so that I can finish paying you off.  You see, the rock slide only blocked my second alternate route; it didn’t kill me (although you probably wish it had because as long as I’m breathing and you have not met my demands, I’m STILL COMING AFTER YOU!).

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 27 comments | Add to del.icio.us
Post tags: credit

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Louis Roth and Margaret Conley, our friends at Binary Star Productions, Inc., have brought us a new short film entitled, “Bank of Evil.”  The film’s teaser text poses the question, “Are major banks behaving like Super Villain organizations from all those spy movies?”

Click here to view the embedded video.

Please watch in full screen mode, and spread this video!

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 3 comments | Add to del.icio.us
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The numerous grammatical mistakes (and end of the message) made me wonder if it was from a low level customer service representative.  I have little doubt in my mind that many of these individuals are at the mercy of higher-ups at Chase, and as such must do the “dirty work” of enforcing edicts by senior executives (which is what really “jerks my chain” when I note that Gordon Smith was off lecturing on “leadership” while his employees were implementing one of the most abusive acts against customers in the history of the credit card industry).

I have researched the name of the submitter as was indicated, and I found several links that were suggestive of the individual’s role with Chase (discussed below).  I do not have the ability to determine the authenticity of the submission, but I do have the right to document what has occurred.  Thus, here is what was submitted:

[-------BEGIN SUBMISSION-------]

I am just writing to let your users know why we are treating you this way.

First understand that times are hard and people are having trouble payi,ng us back what they borrowed. This is a real problem.

As a bank we are expected to make a profet for our customers that invest.

Secondly, we really have already loaned more money to Americans than we feel comfortable about.

The economy in America is just not expected to rise any time soon. The employment rate is bottoming out and this affects our buisness. If people don’t have jobs they cannot pay us back.

So the bottom line is we want people to take their buisness elsewhere. Especially those of you that are not using your cards any more.

Please just transfer your accounts to another bank and leave me alone.

Kelly Hanick

[-------END SUBMISSION-------]

First, there does appear to be a “Kelly Hanick” with Chase.  On the ComplaintsBoard.com site under a post entitled “Credit Card Gouging” I found several comments referencing this individual, including some with an email address and telephone number, along with personal (i.e., home) and corporate postal mail addresses.

As an aside, the aforementioned home address was presented with the suggestion that complaints should be sent there, and while I understand the anger, I encourage site visitors to maintain the moral high ground by corresponding to Chase’s offices.  (This is also why I moderate the site.  This is a PG-13 site, for instance, because I will not let Chase have the upper hand by characterizing customers as a bunch of financially illiterate fools who do not have the vocabulary to do anything other than spew expletives; this would aid Chase in justifying the twisted logic that, they — customers — deserve the treatment that has been bestowed upon them.  I maintain this is especially appropriate given that smooth talking executives such as Jamie Dimon seem able to seduce Congressional representatives in Washington, with their “words of wisdom.”)

Kelly also has a profile at LinkedIn.com, a snippet of which is shown in the screenshot below:

Assuming for a moment the veracity of the comment itself, and that it indeed represents the views of the “Kelly Hanick” referenced above, I will provide a response (although I have saved the notification to moderate on the site, including the IP address):

1) Yes, times are challenging.  Unemployment is rising, entrepreneurs are struggling (one of the major reasons unemployment is rising), and Chase is SQUEEZING consumers and small businesses HARD at a time when they are at a tremendous disadvantage.  When payments are jacked-up so high that families and small businesses cannot pay, they default.  Individuals in this predicament were not planning to default; rather, they were PUSHED INTO DEFAULT, by Chase (and other banks).  Banks as a whole have acted in bad faith.  Yes, Kelly, “this is a real problem.”

2) I have never advocated that Chase or any businesses should not make a profit.  The problem is, Chase has attempted to do so by employing unethical tactics.  Where’s my “proof,” you might ask?  Telling me or customers at large that adding a so-called “service charge” that “is a finance charge” would not impact a promotional APR is a lie (I’m not dancing around with other possible word-choices such as “disingenuous,” “incorrect,” or “misleading” — anyone who knows the first thing about interest and amortization knows that adding a finance charge to an existing APR increases the overall rate).

3) Relative to item 2, above, Chase did rescind the finance charge (in a settlement with the New York Attorney General’s Office).  However, it appears to have done so under pressure while admitting no wrongdoing.  (And for me, personally, the damage and repercussions were already done — I’ve addressed that further below).

4) With regard to the “economy” and “unemployment rate bottoming out”: I have been advocating for small businesses as the major contributors to the economy that they are, for years.  On October 12, 2009, I just presented yet another paper based on scholarly research, and I am well aware that approximately half of very small businesses use credit cards as a source of capital (over ten million very small firms).  And, as can be seen in the SBA Office of Advocacy’s most recently published FAQs

Small firms:
• Represent 99.7 percent of all employer firms.
• Employ just over half of all private sector employees.
• Pay 44 percent of total U.S. private payroll.
• Have generated 64 percent of net new jobs over the past 15 years.
• Create more than half of the nonfarm private gross domestic
product (GDP).
• Hire 40 percent of high tech workers (such as scientists, engineers, and computer programmers).
• Are 52 percent home-based and 2 percent franchises.

Hence, while Chase is worried about being paid, its policies are DECIMATING (in yet another way, besides squeezing consumers to the point of defaulting), the very entrepreneurs who are our only hope for an economic recovery, not just “anytime soon,” but ever.

5) Chase has already made it abundantly clear that its wish is to have people take their business elsewhere.  We got that message.  Unfortunately, that’s not so easy to do, for some individuals.  This is especially true after having their credit scores ruined, lines of credit slashed, and in light of a credit card industry cartel which provides few options (in good times or bad).

6) If Chase is so worried about investors and profits, then it might want to keep in mind that engendering a sentiment of fear, disgust, and loathing among customers is not an effective long-term strategy.  Rather, it is a short-sighted, imbecilic tactic, which will become a “textbook case study” in how NOT to treat customers (by the time I’m finished, here).

7) The submission concludes with the remark, “and leave me alone.”  (Kelly) I’m afraid I’ve already made it clear what the conditions are for that to occur.  Banks want customers to read their contracts; meanwhile, READ MY TERMS, CHASE:

• If Chase Wants Peace, it Can Issue a Press Release.
• Apologize for defaming us (after the first round of change in terms notices), and continuing to disrespect account holders with a PR spin campaign which portrays us negatively before members of the media.
• Now, for me to personally “leave Chase alone,” I’ll simply suffice it to say that Chase has damaged me in several ways, including, but not limited to the following:
  • I was forced to suffer penalties and fees by prematurely withdrawing from a retirement account in anticipation of making higher payments;
  • I am among those that Chase defamed (making payments on time, and in many cases paying more than the minimum);
  • Chase did “steal Christmas” last year;
  • because I knew of no other option but to cooperate with members of the media in order to defend my family, my personal finances have now been the subject of coverage in Business Week, the New York Times, the Wall Street Journal, and other outlets (and I do not appreciate being put in such a position by virtue of Chase’s actions and its wherewithal to take advantage of customers, who can do little else to mount a resistance);
  • Chase’s actions exacerbated an already horrible set of circumstances, causing undue stress and emotional hardship for a family that has already been suffering;
  • As we speak, I have just learned that a rock slide on I-40 near the TN/NC border will block off that interstate for months.  I already drive 305 miles each way to and from work every week, because our house has not sold after over two years on the market (the point being, we’ve got enough problems, and we’re not alone: Chase should work with consumers and small businesses, instead of “kicking us while we’re down”);
  • Chase still sends change in terms notices to my wife and household (that is a very, very, very, bad idea) — I already told you to “leave us alone,” in no uncertain terms.

Accordingly, I personally have no plans to leave Chase alone until the damages to small businesses, customers at large, me, and my wife and family have been undone and rectified (to the extent that this is even possible after all of the pain Chase has caused to its previously identified “most valued cardmembers“).

I’ll admit, it is interesting that a SVP of Customer Service* at Chase would possibly submit such a request — to be left alone.  However, I regret to inform you, Kelly, or any other site visitor that “Chase drew first blood.”  There is no way in hell that I’m going to simply go away “elsewhere.”

Chase shouldn’t pick fights at all, but since it chose to start one (by trying to coerce customers via unethical actions), you can all count on this, until MY TERMS and conditions are met:

I’M (STILL) COMING AFTER YOU

AND I’M NOT GOING TO LEAVE CHASE ALONE

* Noting your previous HR background, might I respectfully recommend a career change, Kelly.  “Customer Service” does not really seem to be a supported organizational role at Chase.  I think most interviewers would understand your “reason for leaving.”

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 12 comments | Add to del.icio.us
Post tags: advocacy, banks, change in terms, complaints, consumers, credit, customer service, economy, fees, interest, notices, penalties, small business

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First, I did some Internet searches, and some are for, while others are critical of this organization.  Personally, I am not in favor of everything that this organization’s leadership or members may believe in.  But, I don’t have the time to analyze or become embroiled in discourse about topics like immigration, who is, or should be the president, political parties, the left, right, or middle.

None of these things mentioned above are on my agenda, relative to the ChangeInTerms.com site.  Do I care about these issues?  Yes.  Do I have time to write posts and conduct research on all of these subjects (and their nuances) mentioned above?  No.

Relative to my employment, I also don’t feel inclined to speak out on all of these issues.  On the other hand, I have the right, the responsibility, and the passion for entrepreneurs to address matters that are affecting small businesses.  When credit is tight or unavailable, this impacts small businesses; when consumers are unemployed and spending is constrained, this impacts small businesses.

Not only do I feel passionate about entrepreneurs, I have been one, more than once.  This is why, along with a graduate education which I pursued in order to become academically qualified to teach, I am now an entrepreneurship professor.

Most small businesses, no matter how you slice it, are indeed very small: 0-1 employees.  They are often entrepreneurial bootstrappers.  Bootstrappers start businesses on kitchen tables and in basements and garages; about half of them by my estimates through formal academic research use personal credit cards as a source of capital.  This amounts to over 10 million businesses.

Oh, and that “0-1″ employees group, that number is around 21.7 million.  There are around 29.6 million businesses in the U.S.  So, you could say that over two thirds of all U.S. businesses are actually very small (perhaps a better choice of words would be “tiny”).  Yet, these are the everyday “Jills” and “Joes” who are vital to our economic recovery.

I want to help other people: students, current entrepreneurs, and would-be entrepreneurs.  It also happens that one of my official duties is to be “engaged” with the entrepreneurial community.  This includes conducting research (publishing), and trying to champion small businesses in every way that I can.

It’s my job.  I love it, but from a practical point of view in terms of expectations of my employer, I am supposed to teach, conduct research, serve, and be “engaged.”  If my discipline was political science, maybe I would be blogging on our system of government as a focus; but, my focus here is ending the abuses of credit card companies against small businesses and consumers.  Consumer spending does impact small businesses, employment, and the economy as a whole, as we have seen.

Relative to the Showdown or its organizers, this is the bottom line: I am against the undue influence that the banking and financial services industry tends to exercise over our Congress through its very powerful lobbyists.  Under the present system, we are where we are, today.  Small businesses are in jeopardy, the economy is a mess, people are hurting: “my people” (entrepreneurs) are hurting.

Banks are pushing people into defaults.  The ABA, American Banker’s Association, which obviously represents the interests of banks, is against the industry changing its ways, and I am for the industry changing its ways.  Banks are not working with consumers and small businesses to the extent that they could or should.

I am hurting, personally, because I am separated from my family by virtue of a “crashed” real estate market.  This occurred, essentially, because of a lending industry run amok and bankers’ irresponsibility and greed, with regulators asleep at the switch.  The “bail out” was misdirected, in my opinion.  We should have created loan programs (which would have broken even, instead of adding trillions to our national debt), targeting a recovery in the housing market and the restoration of consumer confidence, before things ever got so bad.

In my early years, I used to write lyrical poetry.  Lately, I’ve been playing a little tune in my head that goes something like this:

“I want to take my boy fishin’

But I find I’m just wishin’

He and I would bait the hooks

And cast our lines in babbling brooks

We’d really reel ‘em in”

We’d catch rainbow trout

Maybe bream, or

Perhaps a leafy branch or two

It wouldn’t matter, son

As long as I’m with you

Here in Western North Carolina, I find myself surrounded by some of the most beautiful terrain on the planet, including places where I could “take my boy fishing.”  But I can’t.  I’m lucky to do my job and get back home each week to take care of chores, pay bills, visit my family briefly, and return.

When I play that song in my head, it makes me want to cry.  If credit card issuers and the banks with which they are associated want to know why I’m going to keep coming, and coming, and coming, all they have to do is recognize that I am deeply motivated by that little tune.

I will continue to fight the greedy, unethical, and misguided policies that have been implemented by these institutions, because “I find I’m just wishing” that I could be with my family, and that we could live in peace.  (Chase just sent another change in terms on one of my wife’s accounts; that was a very bad idea, Chase: I told you to leave me, my wife, and my family the hell alone. READ MY TERMS.)

And, as I have outlined, I continue to fight because it’s also my job.

If you think things are just “hunky-dory” for small businesses and consumers, and the economy at large, well, I am happy for you.  You may be isolated from the pain that others are experiencing.

You can choose to support, or not, the “Showdown in Chicago” protest.  I support that protest, even if I do not agree with everything that others may have in mind in terms of a larger agenda (politics, health care, immigration, et cetera).

If you do support the protest, but are not in the Chicago area, the Americans for Fairness in Lending site has also provided a link for contacting elected officials in the post which states “AFFIL has endorsed the upcoming events in Chicago, and now we’re asking for you to support it too.”

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 9 comments | Add to del.icio.us
Post tags: "Bail Out", banks, change in terms, consumers, credit, credit cards, debt, economy, interest, small business

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“George Goehl has been a community organizer, strategist, and trainer for 15 years, crafting national campaigns on affordable housing, predatory lending, and immigrant justice issues. George was the founding president of the Coalition of Low-Income and Homeless Citizens and the lead organizer of a campaign to win the first Housing Trust Fund in Indiana. He was the architect of a national campaign at NTIC to pressure the Department of Housing and Urban Development to stem the tide of rising FHA foreclosures and abandoned buildings and helped launch NTIC’s early work on predatory lending. In 2004, George worked as a field organizer for the Center for Community Change, focusing on immigration reform. In 2007 he went back to his roots and became the third Executive Director at NTIC in 35 years.”

Obviously, Mr. Goehl has been fighting for economic justice for a long time.  Presently, the ChangeInTerms.com site has endorsed an organizing effort against what I consider to be the “root of all evil” relative to what we’ve been experiencing in the economy: an industry that wants everything you’ve got, and control over your childrens’ dreams and lives, too.

This industry doesn’t want to be watched over or regulated.  It doesn’t want the CFPA (Consumer Financial Protection Agency), because it’s been happy with the arrangement thus far (doing as it pleases, completely unfettered by a moral compass or even common sense, as evidenced by the fact that its gambling and smugness brought nearly everyone but its executives to the very brink of economic destruction).

It’s not interested in fairness, unless that is defined as “we get it all, and you get nothing.”  It does not want YOU to enjoy ANY rights, or have any PROTECTION.  It wants this CFPA idea watered down, or better yet, dead.  No state or local options means no safe havens for at least some consumers, but the same safe havens from which this industry has been free to operate for years, imposing usurious terms that are in effect legalized loan-sharking.

Yes, I’m talking about the ABA, the American Banker’s Association.

If you are a consumer, then you are as they say in prison, “the banks’ bitch” (I guess this is a PG-13 remark — I hear it on network TV), as far as the ABA is concerned: read this, about the efforts to block the CFPA on the “Save the American Dream” site (which is a campaign of National People’s Action, among others).

With the above as an introduction, I would also like to help the aforementioned “organizing effort” by suggesting that you express support for Mr. Goehl’s “Showdown in Chicago” campaign.  Quoting from an email his organization sent to me:

“Americans are more frustrated than ever at big banks and Wall Street. As a result, people are signing up to act in a united front against bank lobbyists at the American Banker’s Association (ABA) convention on Oct 25-27.  We are ready for them. When bank executives land in the Windy City, they’ll be met by thousands of Americans from Wichita to Syracuse demanding big banks break their excessive appetite for greed and end their efforts to fight reforms that would protect us from their future abuses.”

Showdown in Chicago image used by permission.

We are well on our way to becoming a nation of subservient slaves to banks, which control Congressional decision making through powerful lobbies, campaign donations, and by providing “perks” that ordinary people like most of us can only see from the ground (or below, in the mines where we may be toiling away for our masters): forget what citizen-consumers want.

Banks further control us through the FED, which claims it is better suited to regulate than a CFPA (yet the FED is not “Federal” and is “owned” by the very banks that it claims to be best qualified to regulate — “how convenient“!). 

Please click on the image above, and get involved, in any way that you can.

These bankers, through their association, need to know that — along the lines of picking a fight in a bar with one member of the Hells Angels — to attack one consumer, is to attack every consumer.  Banks have held the strategic advantage because they can “pick off” single individuals.  Only in the collective, banded together, can borrowers have a chance of leveling the playing field against these monolithic institutions and the representatives in government who allow them to exact such abuses against ordinary citizens as we have been witnessing.

It truly is time, for a “Showdown.”  Wear your colors proudly (red, white, and blue), and tell the American Banker’s Association that they’ve picked a fight on the wrong turf: “This is our country ABA, and you’re through owning me.”

NOTE: I found that writing the image caption, “Americans versus the American Banker’s Association” was both ironic, and sad.  The irony is that I am not against the industry.  We need a strong banking system.  I am merely against the abuses of those who have perverted the system without any code of honor whatsoever, except to themselves.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 11 comments | Add to del.icio.us
Post tags: banks, consumers, credit, economy, interest

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In one sense, this story is already well known, at least by virtue of its observable impact.  We have seen it in neighborhoods across America: foreclosures, short-sales, and a devaluation of property values.  Speculators and house flippers were understandably giddy over profits that seemed at the time, easy and never-ending.  But this period of exuberance did end, badly.  Those of us who are concerned with credit card company abuses, are paying the price.  Taxpayers are paying the price.  Investors from around the world are paying the price.

In essence, the mortgage industry sold “instant gratification” to buyers.  Yes, buyers “signed the dotted line,” and certainly, many knew (or should have known, if they lied about matters such as their income and obligations on “stated income” loan applications — that’s why the slang, “liar’s loans,’ came into being), that they too, were taking a risk.

Everyone was gambling.  But in common, the core belief that drove this scenario was the notion that housing prices would continue to rise.  Refinancing, to take “cash out” of real estate investment gains (or otherwise leverage the cash from appreciation in property values), enabled people to buy even more.  They used that money for anything under the sun: vacations, home improvements, adult toys (and “toy haulers”).

We now know this was a fallacy.  Anyone who may be watching squirrels gathering nuts on the ground for the coming winter can use this as an analogy for what many people did not do.  There are many adages which capture this failing, but perhaps the one (which in history seems to repeat itself) that best captures the miscalculation is this one: “What goes up, must come down.”

The “House of Cards” production does a great job of explaining, how we who are fighting credit card company abuses got where we are today.  Banks bought bad investments.  They want to recoup their losses by dipping into other sources of cash.  First, it was the bail out money: your money, and that of your children and grandchildren.  Second, it is every dollar and quarter, dime, nickel and penny, from fees, interest rate increases, and payment increases that banks can impose on the backs of people who still take pride in trying to pay their bills and fulfilling their obligations.  (But for how long?  Most people who walk away and “leave their keys on the counter” have simply given up, knowing that they can never pay.)

Obviously, the lax regulation that allowed Wall Street to profit and party on what we now know are toxic assets (I’m not an accountant, but it seems to me that a so-called “toxic asset” is a bad debt!) enabled a complex scheme with many participants to arise.

Unfortunately, as banks squeeze those of us who are still standing, more and more “able bodied borrowers,” including small businesses which account for much of our economy, suffocate.  Layoffs and fear have led to the destruction of consumer confidence — so spending slows to a crawl.  Here we are.

I personally found that one of the most interesting interview questions that was posed to various participants in the CNBC piece had to do with “feeling guilty,” for having been a part of this debacle.  The body language told a different story than the words that were uttered, slowly and carefully, in several instances, consistently along the lines of “just part of the food chain.”  Well, I already know where I am in the food chain: near the bottom.  However, when these banks try to “eat” what’s left of the rest of us, I want to make sure that we at least leave a very bad taste in their mouth.

Just a Few More Notes

This present post is very difficult to write.  I am separated from my family by virtue of real estate.  I have a house that has not sold, even though it is well cared for and in a decent middle-class neighborhood.  I have debts that are primarily associated with a decision to go to graduate school, trying to help others by becoming academically qualified to teach.  Those who walk away from their own homes (or who are forced to leave by eviction); those who enabled this to happen (see the documentary for the entire “food chain”); and I, along with my wife and children, are entangled.

Credit card companies (i.e., the banks that run them), are dealing with issues such as losses and liquidity pressures.  Nevertheless, because the banks are equivalent to “Goliath,” and we could be likened to “David,” naturally, ChangeInTerms.com and its supporters are in a position such that if we don’t throw “sticks and stones” to defend ourselves in any way that we can, we will be destroyed.

Sadly, I could be sympathetic to the banks’ problems, if they weren’t so mean and uncaring about what happens to others.  The most typical response to consumers (some of whom are the entrepreneurs we desperately need to nourish for a recovery) when they call to “negotiate,” just as appears to be the case with distressed homeowners, is that banks don’t want to work things out.  Rather, they just want to take everything that they can get, forcibly, mercilessly, and immediately, no matter what the consequences may be for individuals — and when taken in the aggregate — for the economy and this nation’s citizenry as a whole.

This behavior on the part of banks is sure to lead us all down a path to further destruction, I predict, unless we “work things out.”  How do we do that (those of us who are on the receiving end of banks’ callous, greedy, untenable dispositions)?  That’s really quite simple.  Anyone who has survived a schoolyard bully knows that the only way to prevail, is to make him or her very afraid of you.  If you are a small person, then you may need to assemble an army and gang-up on that bully.

I actually have a post in draft mode on the subject of “somebody should do it.”  Here’s what it boils down to: all of us “little people” must band together (this is a tiny example, but I sometimes get frustrated: why have I written several times, trying to get someone to print-out a free protest T-shirt, and send me a picture for the site?  Scared; too busy; afraid to raise a “stink” in public — I can understand all of these, because they describe me, but I still fight).

The formula for returning to a period of economic stability is also fairly simple.  Banks are in the business of taking in deposits, and lending at a profit.  Profits are a function of “time and terms.”  If they wanted to do it, they could institute all kinds of creative workarounds, because that’s what ends up happening in settlements.  Why they don’t want to work with people until the situation becomes such that a settlement is for “pennies on the dollar” (with the losses being shifted to those who are still standing, financially), is hard to fathom.  I suppose it’s because enough people have not has yet boycotted media for running credit card companies’ ads; written to affinity partners; threatened the reelection prospects of representatives; or gone “viral,” like the Debtor’s Revolt video.

If you aren’t willing to combine forces and join the fight, then you can count on being fleeced, beaten, and terrorized by such a bully.  We have already seen that this bully’s greed is insatiable.  I guess you’ll get involved once you’ve “lost your backpack and lunch money,” one too many times.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | One comment | Add to del.icio.us
Post tags: "Bail Out", banks, consumers, credit, credit cards, debt, economy, fees, interest, interest rate, regulation, small business

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As a reminder of what the entire industry has been doing, ChangeInTerms.com is introducing its new Stink^SM card.  “The concern for warning small businesses is due to our insights about the true intentions of credit card companies and their ‘desires.’  For example, one promoted ‘life of the balance loans,’ only to later coerce and bully cardholders into accepting higher rates (such as double), with a fixed duration,” said Dr. Robert Lahm, founder of ChangeInTerms.com, who is also the developer of the new product.

The new ChangeInTerms.com "Stink" card: "The smell of credit card company abuse is everywhere."

The Story Behind “Stink”

Behind every act of abuse perpetrated by the credit card industry is a story: destroyed credit ratings, ruined household finances, stressed out borrowers deciding between food or card payments, defaults that banks actually pushed people into, businesses that layoff people or close altogether while card issuers like Chase raise minimum payments from 2% of the balance to 5% of the balance.  “We’re sick and tired of it, and we’re creating a ‘Stink’ card,” said Lahm.

“We don’t like the trickery and traps that have long been used by the credit card industry, and we’d like to let them know that small businesses are vital to the economy, struggling, and not to be abused.  There are no rewards, and there is neither flexibility nor control, when card issuers scheme and have a deceitful plan: imposing onerous new terms after you’ve signed up.  That’s called bad faith.”

“The name for the card was easy to come up with from a creative point of view, a result of thinking about the low-life characteristics and evil-doing on the part of credit card companies: they’ve proven to be inflexible with customers, coercive, rude, unethical, and mean-spirited. We’ve been listening to the agonizing screams of consumers and small businesses, and determined that the C.A.R.D. Act was nothing more than a carefully negotiated settlement riddled with loopholes.  Further, credit card companies are able to change terms for the worse and make rates go up in the blink of an eye, but stopping at least some of the abuses: they lobbied Congress in order to gain over a year’s time for that to occur.  Entrepreneurs especially, have gotten a raw deal — and that’s why we’re reminding everyone, this really ’stinks,’ for them, for the American economy, and for ordinary citizens who have to pay for the greed and mistakes made by the banking industry.”

The new “Stink” card doesn’t have a powerful interactive marketing agency behind it or plans to run ads on  CNN, FOX, or other business related news and information outlets.  Implementing a major media buy would be interesting in the Wall Street Journal, Fast Company, Business Week, Inc., Entrepreneur, radio and transit, “but we’re just a ragtag group like our forefathers, revolting against an aristocracy — only the Goliath-sized banks have the money, after fleecing consumers, for that kind of campaign.”  Fortunately, thanks to the viral nature of the Internet and the fact that people are already outraged about credit card companies, which have now managed to become one of the number one consumer complaints, “I still think the ‘Stink’ will spread rapidly,” said Lahm.

Editor’s Note: For downloadable reports, artwork, and other materials, they’re all over the ChangeInTerms.com site.  It’s what we’re here for, to fight back.  Members of the media can also contact us through the press room.

ABOUT CHANGEINTERMS.COM

ChangeInTerms.com is a consumer protest site, founded by Dr. Robert Lahm (who is also a Western Carolina University entrepreneurship professor), in response to credit card companies and their mistreatment of millions of account holders (including himself). The site provides vibrant discussion and analysis, links to government, regulatory, and advocacy organizations, and sometimes more than a little sarcasm — along with serious critique — about the activities of credit card companies both individually, and as an industry. When credit card issuers change terms for the worse, the site leads the way in fighting back with viral anti-card marketing tools which hit back hard, from a consumer perspective.  ChangeInTerms.com declares to credit card companies: NOW WE’RE COMING AFTER YOU.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 2 comments | Add to del.icio.us
Post tags: small business

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