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 | 10 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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Osama bin Laden: May you be a Chase account holder, at the mercy of its customer service representatives, forever. 

I thank “M” for a comment which included a link to a September 9, 2009 press release entitled, “Consumer Groups Call on Chase Bank to End Minimum Payment Hikes on Fixed Rate Credit Cards.”  Along with additional observations, the release included a copy of a letter that was sent to Chase Card Services CEO Gordon Smith, from the consumer groups (Consumers Union, National Consumer Law Center, USPIRG). 

For those of you who do not know, Consumers Union is the nonprofit publisher of Consumer Reports; the National Consumer Law Center is a leading advocacy organization “protecting vulnerable consumers and promoting marketplace justice”; and  USPIRG is a “federation of state Public Interest Research Groups (PIRGs).” 

Rather than quoting the aforementioned letter in its entirety, I’d like to use this present post to make some observations related to selected passages.  First, considering the source (all of these are premier consumer advocacy organizations), I would submit that the conclusion was certainly a rebuke to Mr. Smith’s leadership decisions while at the helm of Chase Card Services:

“By changing the terms of these promotional financial products Chase is significantly harming the economic stability of the families who make up its consumer base. We ask that Chase reconsider this devastating change in terms.”

The letter included two examples.  One was about a customer who used a promotional balance transfer to pay for his daughter’s college tuition.  And the other example was in connection with a small business owner, who “is having a hard time thinking about how he will pay more than twice as much to Chase each month and still turn over a profit to keep his business going” in light of a new monthly payment of $1200, which had previously been $475 per month.

In case it is not obvious, I have long been aggravated about Chase’s willingness to harm families, students, and small businesses with no apparent sense of restraint or remorse: no “opt out” (despite Chase’s portrayals before Congress in testimony that used opt outs to describe the means by which Chase treated customers fairly*).  The fact that it has pursued this course of action while at the same time defaming responsible account holders in the media is really sick and loathsome as well. 

Since most of my personal indebtedness is associated with my decision to return to graduate school at a significant cost, with what I thought was a worthy motive of becoming academically qualified to teach, trying to help people, I am able to easily empathize with students. 

Now, in my present role as an entrepreneurship professor, I feel duty-bound to speak out regarding the “devastating” consequences that have been imposed on Chase customers who used what was promised to be “fixed APR for the life of the balance” loans in connection with small businesses (many of whom are bootstrapping – sorry they’re not glamorous enough for the Chase corporate culture to appreciate, but these entrepreneurs are the lifeblood of our economy and must be nurtured).  (Do not even get me started, Chase, arguing that customers are voluntarily giving up those fixed rates — the choice is nothing more than another underhanded scheme devised to further enrich Chase executives: Door Number 1, 2, or 3.)

Meanwhile, in light of the above (what Chase has done under the authority of Mr. Smith and his executive team) I’d have to point out (again) that this is not an example of leadership.  The reason for my repetition is that this is a brand new semester, with a brand new Master of Entrepreneurship Degree Program cohort, and a course in New Venture Leadership at the undergraduate level to be taught.  (Thus, I have been thinking about the most important objectives that I have in delivering these courses, in keeping with the notion that I want to contribute to the development of individual students, but also to the cause at large of fostering and enabling entrepreneurship.) 

It’s interesting, first impressions are being formed with these students, and in an opening class session I asked them what leadership “is” (broadly, but also in the context of entrepreneurship).  Obviously, whatever leadership is defined to be in the latest bestselling book — usually a rehash of old concepts using new buzzwords — has long been used as a source from which many would derive their answers.  If you are reading this and waiting for a sound bite or my definition, sorry to disappoint, but I think we’re into a very broad subject (which some have studied their entire lives — and I ask my students to do this). 

I don’t mind framing the subject, however, so let’s start by establishing some dimensionality.  Whatever “floats your boat” with respect to terms that may be used, but I believe that there is “good” leadership as well as “bad” leadership.  To some extent, leaders are associated with their ability to amass followers.  With his charismatic public persona and brilliant use of oratory, Adolf Hitler amassed and subsequently perverted a substantial group of followers who committed unspeakable atrocities and acts of evil.  He almost led the entire world down a path to “unity,” by destroying anyone he did not deem fit to exist such that those who remained would be unified.  Hitler was a “bad” leader.  

(I insert today: Osama bin Laden was/is a “bad” leader.)  I think that the leadership at Chase, is “bad,” too; even if the methods of “bad” leaders differ, the lust for domination and callousness in wreaking “devastation” upon others is apparently the same. 

I think “good” leadership requires individuals who hold high ethical standards.  Frankly, there is a whole scholarly area interested in ethics, but I’d like to keep it simple and give some examples demonstrating ethical breeches on the part of Chase.  For one, back when Chase issued its first infamous change in terms notice, that notice stated: “Important: Your APRs will not be impacted by these changes.” 

I’m sorry, Chase, but adding a so-called service charge that “is a finance charge” (ibid, panel 2) does indeed impact APRs, and stating that it doesn’t is not ethical; frankly, since you are in the banking business and know full-well that such actions raise the APR, I am amazed that Chase would expose itself as being so plainly deceptive in its business practices.  I am even more amazed that Chase correspondence, sent to me from its own Executive Offices would be so absurdly and disingenuously written, in light of basic “financial facts of life” regarding the mathmatical result of adding finance charges on top of finance charges, acting as though this had no impact!

Bullying and coercion are not ethical (it is coercive to raise a payment so radically, “devastating” the household budgets of individuals — including students — and families as well as the operating budgets of small business owners).  Portraying one scenario before Congress (referring to opt outs) only to deny customers an opt out is not ethical (and other than the fact that Chase and the banking industry virtually “owns” Congress and the OCC, I think it’s tantamount to perjury).  Portraying responsible account holders who have met all of their obligations as laggards who were not paying enough, soon enough, before the media is not ethical either. 

Leadership also requires the ability to anticipate the long-term implications of actions that may be taken.  Clearly, attacking a group of “good” customers, alienating them forever, is short-sighted.  With an inkling of positive news in the economy lately, I have recently seen new American Express advertising geared to a small business audience; yet, the imagery of Kevin Johnson and the followers he has on his site, NewCreditRules.com, is what comes to mind first in connection with the AmEx brand.  (Now Kevin is running for office: GO KEVIN!) 

My kid brother contacted me the other day and informed me that Bank of America radically raised his rate to 27% (Bank of America has now taken over my prior mortgage company, and every time I talk with them they want me to speak with a loan officer about originating a new home loan, once I finally sell my present home).  How many times do I have to say it, incompetent bankers?  You’ve messed around with me, my wife (hence, my immediate family), my brother, friends, neighbors, and my colleagues, students, small business owners (therefore the economic well being of all of us), and the result is that

NOW I’M COMING AFTER YOU!  

In short, I think “good” and effective leadership requires at a minimum, an ability to refrain from “harming the economic stability” of not just customers, but of people in general.  Every soul is important.  Harming any person — especially in these difficult times — simply exacerbates an already troubled situation, and that’s what Chase has managed to do (I’ve lost count of the number of people impacted after another wave of change in terms notices — millions) with Gordon Smith at the helm of its Card Services Division.  

I have previously written about the irony of Gordon Smith lecturing at the Thunderbird School of Global Management.  While as he was speaking, minions back at Chase must have been very busy conjuring up and then distributing the first wave of change in terms notices.  The irony was associated with his topic: leadership. 

I certainly hope that in the future, the administration and faculty at Thunderbird would “consider the source” and recognize that their former guest speaker has overseen “devastating” attacks against consumers on the part of Chase Cards Services while he has served as its CEO (duly noted by some premier consumer advocacy organizations), and therefore he does not seem to be an appropriate choice for delivering a lecture on leadership (or marketing, or anything else that I can think of). 

I’m teaching an MBA class in strategy and marketing this semester as well.  I would not be rude to a guest speaker under any circumstances, but then again, I would not invite Mr. Smith to speak in my class (unless he wanted to apologize on behalf of Chase for “harming the economic stability” of every one of us — not just account holders).

The ultimate irony is that causing such harm to others, also harms Chase.  I’m afraid that’s not leadership either, Mr. Smith.  And, I don’t think I’m going to close this post by asking you to “reconsider” (using such a gentle approach, as did the authors of the letter written by consumer groups).  Rather, Chase’s “leadership” can either retract (further details of this demand can be found here – don’t you just love fine print!) its actions, or suffer all of the consequences that will come as a result of destroying its own brand by cultivating an outright rebellion.  Since what I just said is apparently beyond the intellectual or moral capacity of Chase to grasp, I’ll put it in terms that its executive team should be able to understand (as the tyrant and bully that it has been):

If Chase wants peace, it can issue a press release.

I’ll conclude with what I hope is perceived as a respectful remark in connection with the authors of the press release and letter that has been the subject of my discussion here: Chase is not just harming customers ”who make up its consumer base.”  As I have said many times before, when small businesses are harmed, when students are harmed, when individuals and families are harmed, when neighbors, co-workers, brothers and sisters are harmed, then we’re all harmed. 

It does really make me wonder, in light of such a damning letter from these advocacy organizations, would Thunderbird School of Global Management’s faculty sensibilities really support the actions of Chase Card Services? 

* I have previously acknowledged that “fairness” is evidently an outdated concept at Chase, concluding based on its actions that: “Everyone knows the life of our [Chase's] testimony is about the same as our ‘life of the balance loans’ — until we change our minds and change the terms.”

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | No comment | Add to del.icio.us
Post tags: advocacy, change in terms, consumers, credit, credit cards, customer service, debt, economy, interest, notices, small business, Testimony

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“The changes will require card issuers to reprogram computers, retrain call-center employees, verify the legality of the new policies and rework marketing strategies.”

Now, as for the difficulty in gearing up to abide by the new FED rules, I thought I might take a few moments to compose an analysis of the “not going to be easy” gripe (also from Garuccio of the ABA); I admit “just a touch” of sarcasm may follow.

Reprogramming computers: They probably have a lot to do.  After all, creating a system that: automatically generates a late fee with split-second precision (“Oops, it’s 5 o’clock p.m. plus 1/100th of a second: you’re LATE — gotcha!”); sends a letter informing the customer of a new usurious rate; reports a late payment notice to credit bureaus (triggering universal default and therefore notifying other members of the cartel — credit card industry — to also impose new sky-high rates); and, places a flag on the call-center operator’s computer screen (“we got ‘em, whack ‘em, rub it in, gloat”), has taken a while for the credit card issuers to create.  We can’t expect to dismantle a system like this easily — so many interlocking pieces.

Retrain call-center employees: Well, since a piece of my doctoral program was devoted to training and development, I think I can handle this one.  First of all, even though my academic studies involved human adult learners and learning organizations, I would mention training dogs to get us off on the right foot, and keep it simple.  Commands such as “roll over, sit, speak” are usually followed with a reward.

With human beings, we generally recognize intrinsic rewards, and extrinsic rewards.  The former are often associated with a sense of personal satisfaction (internal to the person), while the latter are typically associated with some type of observable (external) reward, typically recognition, praise, or monetary compensation.  People tend to be motivated by a combination of both.

Quoting from a “Post From An Anonymous Chase Manhattan Bank Employee” (as seen on Chase-Sucks.com), here is what appears to be an explanation of the current reward system at Chase:

The reason the bankers at Chase are so pushy, and recommend specific things are because we make what are called “Personal Value Credits” or PVC’s. That is our commission.  We open a checking account: 5 PVCs, we sell a Debit Rewards card: 7 PVCs.  Credit cards: 17.5 PVCs.  Loans and investments pay the most.  Loans are 0.7 PVCs for every $1000, so a $100,000 loan = 70PVCs.   This is why customer service is horrible… there is a tremendous amount of pressure for each banker to make at least 1150 PVCs. That is 100% payout….Chase Bank will do anything, at any cost to acquire their business… Ethical or unethical.  It isn’t the banker’s fault.  We have our jobs threatened unless we push the products they say, when they say.  If we don’t food is taken off of our tables, and we can’t earn commission.

By the way, the opposite of a reward is punishment.  Obviously, if your whole culture is devoted to abusing customers and creating a system of servitude for account holders and employees alike, it will take some time to fix this.  I would suggest replacing the executives with people who have leadership competencies (which include ethics).

Verify the legality of the new policies: Yeah, it will be a real hardship, and time consuming, to implement policies once banks are no longer able to answer any and every customer complaint with a quip such as, “It’s all perfectly legal, and we can do anything we want to you, any time we want, any way we want [as long as we give you 45 days notice that you are going to be bludgeoned -- we used to be able to "have our way with you" with only 15 days notice...tears of sorrow].”  I would suggest replacing the executives with people who have leadership competencies (which include ethics).

Rework marketing strategies: Many people think of marketing as promotion, sales, or advertising.  However, marketing starts with the identification of basic needs and wants (desires) of customers.  Since prior to entering academia I spent much of my career in marketing and service oriented roles, let me shorten the new product development cycle for the banks, dramatically.  Here’s what we want:

• A price we can depend on;
• A product performance that lives up to the promises that are made;
• A customer service experience that is based on we (banks) “want ya!” and your business, as compared to we “gotcha!” and you can take it, and take it, and take it (abuses, that is, especially with no “opt out,” like the one Chase executives described in testimony before Congress, and then failed to provide);
• “Fixed APR Until the balance is paid in full” loans that we pay back without a surprise later on like the one Chase imposed (with no “opt out”) because it “desired” repayment in two years, or “on demand,” or at double the originally promoted interest rate;
• Fees based on whether we, as consumers, actually did something wrong (as compared to banks trying to “make us late” by changing due dates, shredding payments, delaying the posting of payments, or blaming us instead of the postal service when we tried in good faith to send a payment on time);
• Treatment that does not include defaming us in the media;
• A monthly payment amount that we can budget for, depend on, and live with (instead of being subjected to a coercive payment-jacking scheme such as raising the minimum payment by a factor of two-and-one-half times the previously imposed minimum payment, which is what Chase did when it changed the minimum from 2% of the balance to 5% of the balance);
• We want to be able to mutually agree to terms, and any subsequent changes in terms instead of banks being able to use “any time, any reason, or no reason” clauses as a catch-all phrase which serves as a license to engage in loan-sharking and extortion;
• We want to have the ability to settle disputes fairly, noting that a forced arbitration trap exists wherein cases are almost never decided in favor of consumers (you can sue us, and we should be able to do the same to you);
• No “over-the-limit” fees for transactions that you, credit card issuers, approve or deny in the first place;
• Credit lines that are dependable (no lowering of these credit lines with no notice, just to then turn around impose an over-the-limit fee);
• To be treated fairly and ethically;
• Credit card products that are safe to use;
• A reasonable penalty system.  For example, if someone has paid on time for several years, and then happens to be two or three days late (or an hour late), have a little respect and do not rate-jack that person;
• To not loathe you (as most of us presently who have been mistreated and abused do);

On second thought, relative to shortening the product development cycle, I guess the list of consumer “needs and wants” above may take some time to address, given that they are the antithesis of the credit card industry’s current business model.  Organizational cultures have arisen over a period of decades that will be extremely difficult to change.  But, I do have a solution to this apparent conundrum:

I would suggest replacing the executives with people who have leadership competencies (which include ethics).

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 14 comments | Add to del.icio.us
Post tags: banks, consumers, credit, credit cards, customer service, fees, interest, interest rate, Testimony

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ChangeInTerms.com is my response to how well my concerns have been handled thus far.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 4 comments | Add to del.icio.us
Post tags: customer service

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Followers of the ChangeInTerms.com site may think that we would have a big fat grin on our faces upon hearing this news, but we do not.  We are not seeking an end to credit card companies, nor do we hope for the demise of individual employees who work for those companies.  Rather, we are seeking an end to credit card company abuses, and a business model that is based on predatory lending practices.

We do submit that the top executive leadership at most credit card companies is misguided, ineffective, and corrupt.  Since all Americans are now in effect, part owner-investors in these card companies, we also feel that we have every right to criticize Chase’s management team for being extremely myopic. 

I have commented elsewhere about this topic of leadership.  Generating disgust on the part of legions of good-paying account holders who take pride in managing their obligations, is an example of bad faith and bad leadership.  It is truly unfortunate that executives are unwilling to relinquish a business model that relies on rate-jacking, and constantly changing terms as a strategy to extort greater profits.

In any business, customers want reliable service that they understand, and can trust; they want to be treated fairly.  Leadership is about creating an internal and external environment of trust, based on actions, and not merely uttering words.  Chase executives testified before Congress that they treated customers “fairly,” using opt outs as their example to illustrate their point, but now we are missing an “opt out.”  This is a trust issue.  Account holders were heavily solicited to accept a series of “fixed APR Until the balance is paid in full,” offers, but then Chase executives decided to impose a new so-called “service charge,” that in fact “is a finance charge” (thereby violating the fixed APR rate).  This is a trust issue. 

For me, Chase Executive Offices correspondence dated October 10, 2006 that was copied to a Senior Vice President, and a Vice President, assured me that a 3.99 percent fixed APR loan would remain fixed, and long as I did not go over my assigned credit limit or miss a payment, and I have met that obligation, faithfully, and fully.  In multiple rounds of correspondence, including the latest letter I have sent, I still find myself having to point out that the so-called service charge “is a finance charge” (and supposedly, my correspondence with Chase has been escalated to “the highest level”).  Thus, I find it astounding that Chase Executive Offices’ correspondence shows that it is insistent in acting as though the promised 3.99 percent APR will not be affected; Chase knows that under its newly imposed terms, the charges are FINANCE CHARGES.  This is a trust issue.   

Having earned my doctorate at Georgia State University (which is the primary reason for most of my credit obligations beyond obvious exceptions such as a car loan and a mortgage), we spent many good years in Atlanta.  Our two children, both born prematurely, would probably not be here at all, if it were not for the heroic efforts and expertise of doctors and medical staff at Northside Hospital.  Our daughter (born at 30 weeks) was on a collision course with a severe gastrointestinal disorder and would likely have died as a toddler (she gained no weight for a year) if it were not for similarly extraordinary efforts on the part of Scottish Rite hospital (now Children’s Healthcare of Atlanta).  We don’t miss the traffic, but we certainly consider Atlanta to be associated with a difficult, yet cherished part of our overall life experience.

If any of Chase’s operations deserve to be liquidated, it is those that are associated with scheming to profit by writing ever more onerous and unfair change in terms notices.  Chase executives should seek to nurture good accounts, manage “bad accounts” (they should look at things like forbearance, such as those policies that are suggested in my U.S. Department of Education loan: while interest continues to accrue, in the event of a job loss or other severe set of circumstances, payments on those loans can be temporarily suspended until the debtor can recover his or her financial footing).  But no, in the case of the credit card industry, any sign of weakness or temporary difficulty is viewed from a lens that is no different than that of a lion on the Serengeti: prey.  Customers are slammed with fees and usurious interest rates — a quick bite to the jugular. 

Indeed, the credit card industry (and the financial services industry at large) has shown a propensity for creativity.  Unfortunately, due to a lack of ethical or effective leadership, that creativity has been misguided and driven by greed.  That’s why we are all here in this horrible economic quagmire, seeing corporate layoffs as well as suffering on the part of small businesses.  I truly regret that this is where these misguided executives, operating unfettered as they have been in their ability to “use and abuse” customers, have led us and their organizations.

True leaders must have the intellectual-creative capacity as well as the moral compass to consider long-term implications and implement policies and systems that are fundamentally designed to help, rather than hurt.  Leaders must have vision and a propensity to bring about positive change (as a trained researcher, one of my areas of academic concentration and motives for pursuing a graduate education was associated with organizational culture and change, so I find this interesting at many levels).  I see no evidence that this is occurring in the credit card industry, especially at Chase.  Until then, to those of you in Kennesaw, “Georgia’s on my mind.”

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | No comment | Add to del.icio.us
Post tags: banks, change in terms, credit, customer service, debt, economy, fees, interest, interest rate, notices, small business

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Providing a means to “opt out” of new terms changes, and then pay the existing balance under the existing payment terms, is (currently) the industry-standard practice. It’s also what Chase’s own executives have testified before Congress was supposedly Chase’s practice too. (They flat-out lied, apparently.)

Not providing a means to opt out of changes to credit terms essentially reduces a legitimate form of unsecured lending to nothing more than Mafia-style racketeering – where one side makes all the rules.

Not everyone who received Chase’s change in terms notice realized that absolutely no opt out was provided, should they respond in a timely manner to the initial notice. Researching this topic, I’ve found that some folks sent inquiry letters, and some sent what they thought was a conventional opt out request, expecting the normal consequences of paying under the existing terms, and possibly closing their account (not all credit card companies assume or require the latter).

What these people received in reply from Chase was interesting, to say the least:

Check out this link for the devious “opt out acknowledgment letter” that Chase sent in reply. It reads exactly like any standard opt out acknowledgment letter, except for one small, insidious phrase: “that you can choose not to accept.”

The letter very clearly, though, states the following:

“Please accept this letter as confirmation that your account will not reflect the change(s) in terms…”

“We have closed your account at your request and it will remain subject to your current terms…”

Two months later, these same Chase account holders received their monthly statement, only to find that they were in fact victims of the same extortionist “bait and switch” maneuver that befell hundreds of thousands other folks: a new $10 finance charge, and a minimum payment equal to 250% of what it was before. Like others, upon calling “customer service,” they found the latter effectively being used as a coercive lever to get them to accept Chase reneging on its previous agreement (and its own opt out letter text), and agree to double the balance APR as “an alternative option.”

That’s not an “opt out” – it’s just another form of deception.

© Credere for ChangeinTerms.com, 2009. | Permalink | 12 comments | Add to del.icio.us
Post tags: change in terms, Class Action, credit, customer service, interest

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After sleeping on it (and thinking back to some of my research courses), we’re really dealing with a “what is the nature of truth?” sort of question here.  For one thing, Chase is a proven liar (letters to me, testimony before Congress), and for another thing, its spokespeople (and customer service letters) have persisted in putting a “spin” on this issue, continuously calling a something that “is a finance charge” a service charge or a fee.  Thus, we don’t know for certain if the widely disseminated one half of 1 percent quote is an accurate portrayal by Chase, in the first place; it may be.  And, the 400,000 number may be.

On the other hand, there’s this troubling part about how Chase supposedly only “aimed at” people who were making little progress in paying off their loans; not true in my case (see item 6, here), and stories abound about others.  So again, why didn’t Chase back down relative to “aiming at” my loan, if I was “accidentally” included in the targeted group?  And, why didn’t back off relative to these other account holders?

We also have a comment here on the site from “jj” regarding the simple math involved in determining that even at the 2% of the balance monthly payment level, account holders with the low promotional rates would indeed have made progress.

Of course, all of this is beside the point that Chase has no right to take “aim at” customers who were doing nothing wrong.  The nice thing about class action lawsuits (and lawsuits in general), is that the process includes something called “discovery.”  Discovery involves collecting depositions as well as other evidence.  This is where internal memos, reminiscent of the time when tobacco companies had hard evidence that smoking caused cancer, but denied having that knowledge.  Former employees, whom Chase may not be able to control, might also be deposed.  Eventually, the truth comes out.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 5 comments | Add to del.icio.us
Post tags: change in terms, Class Action, credit, credit cards, customer service, interest, Testimony

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Yep, that’s the same kind of conversation that I have had.  It must be a script that the so-called customer service representatives are given to use.

In the pre-bail out days, I suppose that I could more easily let this sort of behavior roll off my back.  But now, knowing that these incredibly imbecilic  jerks are being paid with our (taxpayers’) twenty-five-billion-dollar cash infusion, and whatever they lose in business from acting this way will simply be replaced, I find myself very, very, very, “unhappy.”  I wish we could all get together and “close the ‘bail out’ account that we just opened for Chase, right now.”

© Dr Robert Lahm for ChangeinTerms.com, 2008. | Permalink | 6 comments | Add to del.icio.us
Post tags: "Bail Out", chase credit card complaints, chase credit card fee, customer service

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