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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As you may recall (in connection with questions about exactly what Chase and other banks were doing with YOUR bail out money), following its September 2008 acquisition of Washington Mutual’s banking operations, including the former WaMu brand, Chase now operates more than 5,000 branches nationwide (as is also indicated in the cited press release).  Here’s a link to a handy branch location finder (you might find this useful as you read further).

Meanwhile, the purpose of this post is to convey that some Chase branch managers may not be familiar with protections that we have as ordinary citizens, such as “freedom of speech.”

I realize that it would be nice, from the bank’s point of view, if we were all serfs with no rights whatsoever (economically enslaved), but we still have the right to protest.

For months, Alessandro Machi has been doing a fabulous job of protesting through his live appearances with Daily-Protest.com signs.  And recently, I have been contacted by another fellow “Comrade in the Chase Resistance Movement,” who has also been garnering the approval of motorists who have honked in favor of his message as they have observed his “DON’T TRUST” (side 1) — “CHASE” (side 2) sign.

Of course, Chase branch managers don’t really seem to care for free speech, coming from customers, and that’s too bad.

I do find it ironic that the “that’s too bad we can do anything we please attitude” regularly exhibited by Chase employees (not afraid of the impotent OCC) toward customers has now backfired: Customers have the right to speak out in protest against Chase, for having done as it darned well pleased (in a manner that many customers consider to be outrageous and hurtful).

I have been asked not to promote the name of our new-found friend and fellow protester, but he has supplied plenty of other material and permission to share it.  Taken from his emails, here is a description of the activities with which he has been involved:

**************************************************

“The first 2 days, the bank manager tried to intimidate me any way he could:

1)       He attempted to “video” me with his cell phone.  I blocked my face like an accused criminal!

2)       He asked me if I had a permit.  No, I didn’t.  But I told him that I had already personally visited the Buena Park Police Department the day before and they told me I didn’t need one if I stayed on the sidewalk.

3)       He told me I could not distribute anything.  At that point, I told him to call the police.  He said they were already called!

4)       Police arrived.  The police officer did not even get out of his car!  The officer told me that the bank manager claimed I was blocking their private driveway.  This was a complete fabrication!  I politely suggested that the officer review the bank manager’s cell phone video and the officer will NOT see that on the video!  The police officer then drove away without taking any further statement from the bank personnel!  I went back to holding my sign!

5)       By the second day, I was allowing the bank manager to “video” my face with his cell phone.  As soon as I did that, he wasn’t interested in videoing me any more!

Intimidation didn’t work, so now the branch is in the ignore mode.

For the record, the branch number is #1281, at the corner of the very busy intersection of Beach Blvd. and La Palma Ave., Buena Park, CA (caddy corner to Knott’s Berry Farm – Famous landmark in Buena Park, CA – The nation’s first “themed” amusement park! – Origin of the “Boysenberry” and built before Disneyland, also in Orange County, CA!).

It seems odd to me that the branch numbers do not appear on their website!

Here’s what else I have done.  I have gone to about 7 branches now, and have personally handed the “BEWARE” flyer [see below] to the bank manager (if possible) or an assistant manager, and informed him or her that this flyer will be given to all of their customers.  I then walk out of the branch.  They usually look dumbfounded!  But, from what I gather, I think they have a procedure in place for this kind of activity.  I believe, at the very least, that they are instructed to fax the “flyer” to their District Manager.  My 7 branches are in 2 counties, Orange and Los Angeles!  I hope Chase is buzzing behind the scenes with one or more District Managers receiving the same flyer from all of these different branches.

This is something people can do!  Take the flyer to their local Chase branch.  As many branches as possible!  Ask to speak to the manager.  Tell him or her that this flyer will be handed out to all their customers.  And then leave!”

**************************************************

One word of caution to folks: If you decide to mount your own protest, make sure you are familiar with your rights and responsibilities under your own local laws (and keep in mind that ChangeInTerms.com is not engaged in rendering professional or legal advice).

For example, you will note that the police department in Buena Park was consulted, first.  Further, in the above instance, the flyer could not be given to any customers on bank property (doing so would have been considered trespassing).  But, as a customer, people do have a right to “communicate” (for example, with the branch manager and/or his or her designated representative). 

I also learned that one of the benefits of the location associated with the photos below was as follows:

“By the way, another advantage of this branch at this busy intersection is because I believe the bus stop at this corner is a bus schedule, timepoint. That means that if a bus arrives there ahead of schedule, the driver must wait there until the scheduled departure time. So, I use that opportunity to hand the flyer to the bus driver and tell him or her to spread the word to all of their friends and work associates! Not one driver has refused it! Hey, they need some light reading to fill these pauses in their day!”

Here are the photos (we love them!):

Beach Blvd., north of La Palma Ave. looking north-west. “DON’T TRUST”

Beach Blvd., north of La Palma Ave. looking north-west. “CHASE”

Here is a link to the handout (about which our friend stated, “I would like to see this flyer go nationwide!” — so would we!).

Finally, here is a copy of a press release that was sent to The Orange County Register (no answer — but there are plenty of other members of the media who may appreciate having a copy):

For Immediate Release

To: Michael Mello, The Orange County Register

08/04/2009

Buena Park, CA

Hundreds, if not thousands of motorists were greeted today driving north on Beach Blvd., north of La Palma Ave. by the words, “DON’T TRUST CHASE”. Those words were emblazoned upon a sign held by a yet to be identified male protester in front of the Chase Bank Branch located on that corner. Many motorists felt inclined to honk in support of those words.

Apparently, this individual has grievances with the “Change in Terms” on credit cards issued by Chase Bank. Upon learning of the presence of the protester, the bank manager emerged from the branch in 90+ degree heat, and proceeded to video the individual with his cell phone. When that did not encourage the protester to leave, the Buena Park Police were called to complain that the protester was allegedly, illegally blocking their private driveway on Beach Blvd. Upon arrival, the police determined that no violations had occurred and they drove off without taking any further statement from bank personnel.

According to the protester, these daily protests will continue until an acceptable resolution is reached with Chase Bank.

###

I can’t help but wonder if Chase sent any of its infamous change in terms notices to police officers (maybe the one who was called by Chase’s Branch Manager!)?

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 29 comments | Add to del.icio.us
Post tags: "Bail Out", banks, change in terms, credit, credit cards, interest, notices

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As we know, credit card companies are supposedly overseen by the OCC.  However, when complaining to the card issuer directly, the response that customers often receive is either condescension, laughter, or an answer that is strikingly similar to our current President’s campaign slogan, “YES WE CAN.”  This means that for all intents and purposes, credit card companies are not regulated by anyone. 

Thus, cardholders are regularly sent notices about changes that are too astounding to “believe in,” and find that they have no real recourse through any regulatory agency.  (I note that according to some stories I have observed, card company representatives seem to have no sense of fear whatsoever when a customer threatens to go to the OCC, and this threat may even invoke laughter — so much for the myth of oversight.)

This does not mean that no recourse whatsoever exists.  De-marketing is a very effective tool, even though it may take time.  And having no other choice, this has been my strategy in mounting a resistance to a Goliath such as Chase.  I would remind any reader that Chase “drew first blood.”  Chase finally pushed me way too hard, and crossed a line with its bullying of account holders that I simply refused to accept. I am now fighting for all account holders: 

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

Surrender terms include the demand that Chase must take back its egregious change in terms in its entirety, restoring every account holder to his or her previous condition – even the ones who “agreed at gunpoint” to give up their previously promised promotional rates; I also want an apology for defaming us (this isn’t all; read the linked post for more discussion).

With the above in mind, I find it interesting that according to a recently released report from a PEW Charitable Trust study entitled, “SAFE CREDIT CARD STANDARDS: Policy Recommendations for Protecting Credit Cardholders and Promoting a Functional Marketplace,” 100 percent of the credit cards it reviewed “allowed the issuer to apply payments in a manner which, according to the Federal Reserve, is likely to cause substantial monetary injury to consumers.”  The study’s assessment covered general purpose consumer credit cards from the largest 12 issuers (which control more than 88 percent of outstanding credit card debt in America), as of December, 2008. 

The purpose of the study (undertaken in partnership with the Sandler Foundation) was to “address growing concerns about abuses in the credit card industry.”  Accordingly, since the purpose of the ChangeInTerms.com site is to end the abusive treatment of account holders by credit card companies, I’m glad to see such a noteworthy organization take an interest in these abuses. 

Not that the PEW researchers contacted me, but I also feel vindicated in knowing that it too found “the overwhelming majority of credit cardholders are vulnerable to unfair and deceptive practices.”  For instance, “in a one-year period between 2007 and 2008, issuers used these powers to raise interest rates on nearly one quarter of cardholder accounts.”  These interest rate increases affected “approximately 70 million accounts” and generated “at least $10 billion in additional interest charges” for the banks from customers who were expecting to receive the deal the credit card companies promoted, which was altogether different.

The OCC appears to be impotent, and I expect this may be mostly because of what appears to be a very bank-friendly disposition on the part of Comptroller of the Currency Dugan.  He has stated that ”defining, prohibiting, or restricting particular product terms” is a “slippery slope” (see page 8 of the linked statement) that should be avoided.  He did go on to recommend opt outs, but “oops,” Chase did not provide one relative to its outrageously abusive change in terms issued in November, 2008 (which has been the subject of much discussion here).

In other words, regardless of an extraordinary range of ever-more egregious acts of abusiveness, let’s allow the banks to continue imposing “we can do as we damn well please terms” on account holders (and be smug about it — operating with impunity as they have been doing).   

The new FED rules against “unfair and deceptive” practices do not take affect soon enough (Chase wanted 18 months to comply with the new Regulation Z rules, but it thought its customers should only need 15 days to comply with its new rules).  Until then, banks like Chase seem intent on stepping-up the pace of these practices, effectively engaging in legalized loan-sharking, completely unfettered by any meaningful regulation. 

Banks’ recent behavior could be likened to a boxing match, when after the bell is rung they’re getting in a few more below-the-belt punches, mercilessly beating consumers (and small business owners).  No one seems to be talking about this, but even after the new rules kick in, enforcement will be necessary – it takes both laws and the enforcement of those laws for the rule of law to have any meaning.

In case you are wondering why I started this post with a discussion of the Consumer Product Safety Commission, it is because I have been intrigued with the notion of “product safety” relative to intangible products, like banking services and in particular, credit cards.  According to PEW, which made recommendations for a “safe credit card,” one key component is ”an opportunity to opt-out of any proposed change by closing the account and repaying it under the unaltered terms.” 

Since Chase’s change in terms does not include an opt out (despite testimony from its executives before Congress, which highlighted opt outs to illustrate the means by which Chase treated customers “fairly”), then we might also conclude that under PEW’s recommended product safety standards, Chase cards would obviously be deemed “unsafe.” 

As cardholders who have been defamed, injured, and otherwise “burned” by the Chase-branded product, we already know that using Chase products proved to be dangerous.  Therefore, to prevent any further “substantial injury,” I think Chase cards should be subjected to an immediate PRODUCT SAFETY RECALL. 

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 12 comments | Add to del.icio.us
Post tags: banks, change in terms, consumer credit, consumers, credit, credit cards, debt, interest, interest rate, notices, regulation, small business, Testimony

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The aforementioned Reuters report indicated a list of credit card industry representatives that may be involved, which was as follows: Discover Financial Services, Visa, Mastercard Incorporated, JPMorgan Chase and Co, Wells Fargo and Co, Citigroup Inc, American Express Co, Bank of America Corp, Capital One Financial.  If the banks do face any changes, I expect that they’ll whine that they need plenty of time to comply.  (Remember, Chase argued customers should only need 15 days to comply with its new rules, but it wanted 18 months to comply with new FED Regulation Z rules.) 

I note that an unnamed official was quoted to say the meeting is “basically just a part of our normal outreach to different groups to hear some of their concerns.”   A Capital One spokesperson said that “We have been invited to the White House.”  I’m also willing to bet that at the meeting these supposedly competitive company representatives will all get along with one another famously — they operate like a drug cartel, so I’m sure it will be one big happy family gathering.  Perhaps the White House chef will have some wine ordered in from the “old country” to serve with lunch (no fryer leg quarters with cream of mushroom soup for these invited guests).     

We already know that the theme on the part of the bankers will be the one we always hear: we have to manage risk.  But the reality is that what banks really mean (as evidenced by their actions) is that “if we can’t rate-jack and payment-jack account holders, and design card products with built in traps such that we can ‘have our way’ with customers [victims] any time we want,” we’re going to threaten that credit availability will suffer and costs will be higher.  And you know what?  I hope that when these banks later try to prove their point, it backfires on them and leads to a resurgence of community banks and credit unions.  Once gasoline prices double again (they will), we’ll all need to stay closer to home, anyway.

Somehow, in the minds of these bankers, they have grown accustomed to thinking that it’s “normal” and a valid “business model” to offer customers one set of terms, with the premeditated intent to change those terms into an altogether different proposition as soon as the account holder is “hooked.” 

In any other industry, this is called bait and switch, but with banks, they call it “managing risk.”  I do wonder how much risk all of those “clever MBAs and lawyers” working for these banks think is entailed in alienating a group of good-paying customers who have done nothing wrong? 

Of course, Chase has been the worst in recent times, using a blatantly coercive tactic to get customers to give up their previously promised promotional rates.  How does it help to manage risk, making payment terms so onerous (raising them to two-and-a-half times the previous rate) that customers can’t pay — literally pushing more and more American consumers into default?  These customers, already paid these banks once, by the way, with bail out money (so the banks want to double-dip). 

Well, I think it’s about time that our government did some “outreach” to “hear the concerns” that banks have created for consumers and small businesses, instead.   It’s ordinary working people, not banking executives, who are being massacred with an avalanche of change in terms notices by this group of thugs.  Hear some of mine (“Bob the Professor”):

1) Sooner or later, the bail out costs will come out of payroll deductions and increased fees and taxes on everything you buy: gasoline, cigarettes, car tags, property taxes, utilities, sales tax (have you noticed list of fees and taxes on your phone bill?). 

2) Your children and grandchildren are going to be footing the bill for this bail out debt, too. 

3) Talking about risk, I fear a new era of economic slavery (our ever-shrinking paychecks will be what’s left over after working for the government and the bankers most of the year). 

4) The problem that started this all in terms of consumer confidence and the tumble was the housing market (which has caused a year of separation/commuting in my family thus far); the bail out funds would have been less or perhaps not necessary at all if instead of bailing out banks, government had addressed the housing issue, first. 

5) Banks are knee-capping entrepreneurs – next to war or acts of terrorism, there is no greater risk to the possibility of an economic recovery, than that. 

Given that a significant portion of our so-called free press serves as nothing more than a mouth-piece for the financial services industry – as one of the most aggressive industries of all relative to advertising expenditures — I am also not surprised that reports about “invitations” to speak to Congress or the White House practically all include a “poor, poor, banks have to control risk” justification. 

Noting that Chase executives already lied about providing opt outs in testimony before Congress, I gather that there’s a good chance that they will not be held accountable by the media (or anyone else in our government) for whatever they say when they attend a meeting at the White House, either. 

Have you seen any significant coverage about these lies and misrepresentations with regard to the missing opt out despite the prior testimony in the major media?  Not me.  If I tune in to the national brand 24-hour news stations, it’s more likely that the story I’ll see 7 times in one hour is  ”a woman found an alligator in Florida.” 

Where’s the “Chase executives lied to Congress about opt outs” headline?

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 13 comments | Add to del.icio.us
Post tags: "Bail Out", banks, change in terms, consumers, credit, debt, fees, notices, regulation, small business, Testimony

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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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Before I lose anyone with my discussion, let me first address the announcement portion of this present post.  I told Abigail that I did not want to be presumptuous in publishing email addresses and phone numbers on this site without permission, but she was fine with that.  Accordingly, here is the announcement (in other words, if YOU are in the Bay Area, please contact Dora or Abigail and try to attend — so the announcement is being posted for anyone who can possibly attend):

Thank you for your response to Anna Werner’s story on credit card hassles, and for sharing your own story.  We would like to invite you to join us for a group interview here at our studio in San Francisco on March 10th, to be aired as a follow up.  If you are available on that day please let us know what times work best for you, and we will try to arrange a time that works for as many people as possible.  If you are out of the area or unable to participate for any reason, we still appreciate the comments you shared with us. Please contact myself, Dora Ruhs, or Abigail Sterling, contact information below.

Thank you,

Dora Ruhs
KPIX CBS 5
theodora@pacific.net
415-765-8815

Abigail Sterling
KPIX CBS 5, Investigative Producer
asterling@kpix.cbs.com
415-765-8972

Abigail and I talked about several relevant points on the phone yesterday, some of which many of you are already familiar.  Here are some of the main concerns that I have (wish I could afford to accept the invitation Abigail extended to me to come to the studio):

1) Chase provided no “opt out” despite Congressional testimony assuring our representatives that Chase played “fairly” by allowing customers to not accept a change and pay under the old terms.  I called this lying before Congress.  Others may want to use a softer word like “misrepresentation,” but given that the hearings were all about avoiding new regulations from the point of view of these Chase executives, I feel no need to soft-peddle any characterization of what these executive did: they told Congressional representatives one thing, and then Chase turned right around and applied the exact opposite treatment to customers who were not provided with an opt out relative to this change in terms under discussion.  Too bad, I doubt that they’ll go to jail for perjury (too much power and influence in the “elite member of society club” for that). 

2) As it relates to the above, paying the entire balance “on demand” on approximately 30 days notice is not an opt out.  A few of points to be made here:

• First, I think may Chase like to use the word “option” in its PR releases and letters because it is confusingly similar to the sound of an opt out. 
• Secondly, if you can pay off a loan “on demand” on short notice, such as a car loan, or a mortgage, or a larger long-term “fixed APR Until the balance is paid in full” loan that you may have had with Chase, you always had that “option” (Dorothy, just click your ruby-red heels, send in the entire balance, and say, ”I want to be free, I want to be free, I want to be free of Chase”). 
• Third, were someone at Chase to read this and assert that my facts weren’t straight regarding “approximately 30 days” as was done to an academic colleague on his blog (thanks for your support, Professor Ganem), recently, this is where I get to turn the tables and have the same kind of fun that credit card companies enjoy when they screw customers for being 30 seconds late.  I am referring to the USPS mail, and timing, and when things are sent versus when things are received, and last but not least, playing games with due dates (and notices), and the fact that a Chase attorney argued that its customers should only need 15 days notice, while at the same time telling the FED it needed 18 months notice to comply with new rules under Regulation Z.  I received my change in terms notice (a statement “stuff-it” surprise) around the first of December, 2008 (this is what prompted me to write Chase Card Services CEO Gordon Smith on December 3, 2008, and also to write the “How Chase Card Services Stole Christmas” eBook); the changes took effect “on or after the first day of your [my] billing cycle that includes [included] January 1, 2009.” 
• This present item also speaks to the mentality, “we can screw customers any way we want, as long as we give them notice.”  

3) Chase really does want to play “look over there” and deflect attention relative to the word “fee” or “service charge.”  As I stated in my email to Anna Werner:

You need to know that some aspects of your report are misleading (and Chase would like to keep it that way):

“Plus Chase also added a service charge of $10.00 per month on both cards.”

Journalists have evidently not recognized that the so-called $10 per month Chase “fee” or “service charge,” as stated in the notice, “is a finance charge.”  This may sound like simple semantics, but it is a pivotal fact in the numerous lawsuits we are tracking on our site (9 announced, and I am regularly receiving communications directly from law firms that may be working on even more — looks like Mr. Sauer’s case may be number 10).

Chase would like you, as a journalist, to use the word “fee,” (or “service charge”) because had it not made a mistake in its own fine print by stating that the new service charge “is a finance charge,” then it could possibly have gotten away with this.  Because it “is a finance charge,” Chase has violated the terms of a promotional rate that it promoted as “fixed APR Until the balance is paid in full” loans.  As far as I know, I am the first person to point this out in a certified letter sent to Chase Card Services CEO Gordon Smith (on my site; see the category “Correspondence” on the right hand side navigation links).

As is alleged in the pending lawsuits, and I have every reason to believe a “reasonable juror” would agree, the change in terms document states, “and it is a finance charge” on panel 2, and on first side of the document, it states, “The FINANCE CHARGES section of your Agreement is amended…These charges are finance charges” (please note the all caps print, I have not added any emphasis, the document itself presented the text this way in its original form).

 4) Another part of the previous coverage, was very problematic beyond the instance of the individual the reporting profiled:

“When CBS 5 Investigates asked Chase about the changes, the company said it changed those rules for customers who ’have carried large balances for over two years’ and made ‘little progress in paying them off.’”

This is my response (clearly demonstrating that Chase is spinning another misrepresentation before the media):
 
http://www.changeinterms.com/2009/02/20/chase-aimed-at-account-holders-who-were-only-paying-the-minimum-someone-must-need-new-eyeglasses/

5) One of my very biggest concerns, is for small business people (and how squeezing them right now is a very bad idea for the economy and any hope we may have for a recovery).

6) Banks lack (competent, ethical) leadership, and they are actually making the situation far worse all in the name of avoiding risk and protecting themselves against defaults.  How does raising a payment from $400 per month to $1000 per month, for instance, help that customer avoid defaulting?

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 2 comments | Add to del.icio.us
Post tags: banks, change in terms, credit, economy, interest, notices, regulation, small business, Testimony

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I found it ironic that while Chase Card Services CEO Gordon Smith was delivering a lecture on leadership at the Thunderbird School, the rest of Chase’s employees were busy stuffing change in terms notices in envelopes, and mailing them to account holders (who were mislead by a deceptive promotion that promised a “fixed APR until the balance is paid in full“). 

About the only way I’d want to ever see Mr. Smith addressing my students, would be if he were to come to my university and deliver a formal apology.  Living up to promotional claims, now that is leadership, Mr. Smith.  Accounting for taxpayers’ bail out money, is leadership, Mr. Smith.   Apologizing to Congress on behalf of Chase Card Services for previously delivering disingenuous testimony (stating that Chase treated customers “fairly” by providing “opt outs”) is leadership, Mr. Smith.  Making a profit through the ethical delivery of products and services, and competing by “doing the right thing” to build an enduring, positive brand image, is leadership, Mr. Smith.  Practicing what you preach, is leadership, Mr. Smith. 

As it relates to leadership, I am very proud of the current Master of Entrepreneurship Degree Program students I presently teach.  They are destined to become future entrepreneurs, and they already grasp what “Entrepreneurial Leadership” is (and what it is not).  These are individuals who I believe are this nation’s best hope for normalcy, followed hopefully, by prosperity (as we continue to languish in a time of tremendous economic adversity). 

The present Cohort (a group that progresses through a series of courses together, building social capital, along with increasing skills, knowledge, and abilities along the way – including an appreciation for ethics), has recently worked to gather to produce a podcast CD.  The CD has been/will be distributed in both physical and electronic formats (you may also freely share this; download the jpg image below, and link it to the file on a site, if you have one, or simply forward the link to the file without the image).  For those who may be interested, click on the image below to access the electronic version:

Do keep in mind that small businesses, especially entrepreneurial bootstrappers, have often relied on credit cards as a source of capital.  I’ve posted a little remark like this one on other sites, and in some cases received responses that could be best characterized as personal attacks about why I shouldn’t be a teacher (as though I were telling students to use credit cards, but that’s not what I said; I said: small businesses do use credit cards, not that I advised them — or students — to do so).  Now that you are on my site, please read my papers and look at my own testimony before jumping to any conclusions.  It would not take more than two or three clicks to understand that I loathe credit card companies’ abusive treatment of account holders who may use business or personal credit cards, or both.

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 5 comments | Add to del.icio.us
Post tags: "Bail Out", banks, change in terms, chase credit card complaints, chase credit card fee, credit, credit cards, economy, interest, notices, small business, Testimony

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Users of the product can customize messages and then print their own T-Shirt artwork, if they wish to join in the protest against credit card company abuses “at any time, or for any reason, or for no reason,” quipped Lahm, who has been a stanch advocate against credit card companies’ use of similar wording in some card holder’s terms of service agreements.  The kit can also be used to create and send customizable messages to anyone a user likes (just print on regular paper): “credit card companies, Congressional representatives, journalists, you name it!,” said Lahm.

Several of this product’s preloaded messages are associated with observations about the impact that Chase’s new change in terms notice may have not just on account holders (as noted in the Wall Street Journal, and elsewhere), but on the economy at large, as Americans continue to struggle despite the bail out. The aforementioned notices were distributed by Chase over the last several weeks, and took effect as of January 1, 2009. Their primary characteristics were raising monthly minimum payments from 2% to 5% of the account balance, adding a $10 monthly “finance charge” (even if the account has no balance), and providing no “opt out,” which is contrary to a previous statement delivered by a Chase marketing executive in testimony before Congress. In the absence of an “opt out,” says Lahm, the consumer has no “escape hatch,” and is trapped.

While these changes could prove to be devastating to consumers, Lahm is just as concerned about the impact on individuals who are operating small businesses. Citing SBA (Small Business Administration) figures, he has indicated that over 99% of all businesses, are small businesses. According to his academic research, about which he has previously provided testimony before before Congress himself, entrepreneurial “bootstrappers” (people who start a business with little or no capital) comprise the majority of all start-ups, and they often rely on both personal and business credit cards.

In the case of his own loan with Chase, which was originally promoted as one that had a “fixed rate” of 3.99% for the life of the balance, Lahm estimates that his payments will skyrocket from $239 per month to almost $600 per month on a balance that is just under $12,000. Most of his debts (discussed on his site and in an eBook he also published entitled, “How Chase Card Services Stole Christmas“), are associated with attending graduate school, which included some challenges along the way. His intent was to become academically qualified to teach at the college level, and he is now an Associate Professor of Entrepreneurship. Lahm outlines his payment history, which he states has been flawless over many years and types of obligations, both commercial and consumer oriented in nature.

ChangeInTerms.com is a consumer protest site, created by Dr. Robert Lahm (Western Carolina University entrepreneurship professor), in response to credit card companies and their mistreatment of many 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. While the site laments that it can’t actually change terms from a legal perspective, it submits that they can be changed with credit card companies from a consumer perspective. The site’s description 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: "Bail Out", advocacy, business credit, change in terms, Chase, chase credit card complaints, chase credit card fee, Congress, consumers, credit, credit cards, debt, fees, minimum payment, notices, small business, Testimony

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For those who are brand new to this issue (or site), the basics of the notice included raising minimum payments from 2% to 5%, imposing a new $10/month “finance charge” (whether or not a balance is carried, at all): and its most sinister feature, the notice was conspicuously (and shamelessly, on the part of Chase spokespersons) devoid of an “opt out.” 

If an account holder can pay off a large balance on short notice as a lump sum payment to any bank then he or she can “get out,” but that’s not the same as an “opt out.”  Many people I’ve read about or communicated with otherwise by email, phone, or comment posts – if they are able to do so — are taking this “get out” approach in dealing with Chase, typically declaring: “I hate Chase,” “I’ll never, ever, do business with Chase, again!,” “Chase can go to hell,” or the like, in the process (see my “Rant-roll”).

An “opt out,” as previously described by Chase and others in the industry allows a customer to reject newly imposed terms by exercising the option (hence, “opt”) to voluntarily close an account and continue to pay under the old terms (at the old rate, and so forth), until the balance is paid off.

I have already cited the specific statements reassuring lawmakers that Chase was “fair” in its treatment of customers delivered before Congress by Carter Franke, who provided testimony (U.S. Senate Committee on Banking, Housing and Urban Affairs, January 25, 2007) in his capacity as Chase’s Chief Marketing Officer.  In that testimony, he used opt outs as an example to illustrate the way that Chase supposedly worked with account holders and (supposedly) treated customers fairly.   

I have noticed and commented on the similarities that can be observed in various (professionally crafted) statements delivered by Chase executives and media spokespersons.  You can be assured that they know exactly what they are doing, well ahead of time.  I have also found a similar passage, reassuring lawmakers about fairness and opt outs, relative to what was delivered by Carter Franke, in the testimony that was provided by the former CEO of Chase Card Services, Richard Srednicki.  This latter statement by Mr. Srednicki was delivered before the U.S. Senate Permanent Subcommittee on Investigations on March 7, 2007.  Excerpted from that statement, I found the following passage:

“…we let them know they have options. They can discuss the matter with us and, if they wish, they can opt out and close an account and pay off the balance at the old interest rate over time.

We do want to help customers, and we treat them as individuals.”

I’m sorry, but as a said in my letter to the current CEO of Chase Card Services, Gordon Smith (and I continue to stand by that letter as it is substantiated by the facts and documents that I have in my possession): “Chase certainly lied to me: ‘3.99% fixed’ is not the same as 3.99% plus $10.00 per month (whether or not the consumer carries a balance).”

I certainly wish that I could easily and affordably simply “get out” as some others are able to do and are doing.  I also realize that some readers here (probably those who are insensitive to the plight of individuals who, like me, took on debts, but did so expecting that they would pay in good faith, and not be mistreated by banks that are clearly acting in bad faith), might think to themselves, “What’s the big deal over $10/month?”  I’ll answer: for me, $10 is not that big of a deal from a financial point of view; rather, it’s the very frightening precedent that matters. 

The lack of an “opt out” certainly should have every cardholder, regardless of brand, on high alert. 

If Chase is not stopped, then it truly will set a precedent before the eyes of other banks, demonstrating that from here on, credit card companies shall serve as lord and master, chief tormentor and overseer in all of our lives.  I’ll bet MBNA’s only regret (it has since been bought out by Bank of America), is that it did not come up with this new idea about how to manipulate and bully customers, first.

Equally frustrating, is the fact that banks are simultaneously enjoying a FED funds rate that is so low, money is almost free to them, and our bail out money (Chase got $25 billion); yet, Chase wants to eliminate opt outs (demonstrating its “true colors” in a time of national distress: fairness is being thrown out the window at the same time). 

I want Chase to know that it has options, too.  It can leave my account the way it promised, and it can issue a press release retracting the change in terms notice under discussion here in its entirety (I won’t ask for an apology — if it acts quickly — because that seems to make lawyers “freak out”).  Alternatively, Chase can provide an opt out for all customers on this present and any future change in terms notices it may issue (like its executives stated in testimony that it would do).  Either way, I do want to see it in a press release before the public at large (apparently it’s not a problem making misleading statements in Congressional hearings). 

When I see the press release (disseminated), I will quit writing posts, rising in page rank in search engines, and doing all that I can to demarket the Chase credit card brand (as its issuer is employing deceptive marketing practices).  This increasing visibility can be atributed to the support of  ChangeInTerms.com site visitors (thank you!) – spread the word to credit card companies in general and Chase in particular:

NOW WE’RE COMING AFTER YOU

© Dr Robert Lahm for ChangeinTerms.com, 2009. | Permalink | 27 comments | Add to del.icio.us
Post tags: "Bail Out", banks, change in terms, Chase, chase credit card complaints, chase credit card fee, Congress, credit, debt, FED, interest, minimum payment, notices, regulation, Testimony

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