“The credit card industry thrives on the confusion and powerlessness of consumers to both nickel and dime the average card-holder and to commit highway robbery of anyone who slips up even in the slightest,” said Levin.
The committee heard testimony from the CEOs of the top three credit card issuers in the U.S., as well an Ohio consumer, Wesley Wannemacher, who used a Chase Bank credit card in 2001 and 2002 to pay for approximately $3,200 in expenses for his wedding. These expenses exceeded the credit card limit of $3,000 by about $200. Over the next six years, he made payments toward the debt averaging about $1,000 per year, and as of February 2007, he had paid about $6,300 on his $3,200 debt. However, his statement showed that he still owed $4,400 – a total of $10,900 in charges for $3,200 in purchases.
7 comments:
THIS IS WHAT THE CREDIT CARD INDUSTRY DID TO ME AND MY BUSINESS.
We are the owners of A&B Enterprises dba Fantasyline. We had been in business for 23 years. Our business was adult talk lines. We have always used live operators to screen our callers and verify bank information. We had excellent fraud control and verification procedures. Our primary form of payment was VISA and MasterCard. We had various merchant accounts. Initially we had merchant accounts with banks. At some point these banks discontinued telephone order processing and or credit card processing so we switched to third party processors etc. Our merchant accounts never had a bad mark against them. They were never cancelled due to chargebacks.
Our last processor was Online Data in Westchester IL. In December 2004 they informed us that they had to switch our account. In April 2005 they stated they could not switch our account because we sold downloadable DVD’s. This was false. We enclosed a letter to that effect to Online Data. The letter did no good and Online Data informed us that due to the nature of our business they could no longer process our charges.
Online Data recommended we contact Nelix to find a merchant account. Nelix refereed us to ECS World UK. This arrangement did not work out as ECS World UK failed to pay us monies owed.
Due to the loss of our merchant account we had to close our business. Online Data claimed that they were being forced to close all Adult Oriented Web Businesses by Visa and Mastercard International and Chase JP Morgan Bank. Fantasyline never was a Web Business. Closing our business abruptly caused us severe hardship.
All deprived us of our livelihood. Aside from depriving us of our livelihood and the complications that caused, we always paid high merchant fees.
Marcia Siegel
marciasiegel2004@yahoo.com
Is Carl Levin calling credit card users stupid? Keep in mind that politicians keep ballot access restricted to the two major parties because they say more than two would "confuse" voters. It's their way of saying you are dumb.
Is your contention that Mr. Wannemacher was not responsible for his own actions? Whet did he expect to happen when he voluntarily exceeded his credit limit? What did he expect to happen when he didn't promptly repay the excess amount plus the fee he was charged?
I imagine the man expected to be able to repay the overage, over time, plus interest. Maybe even the 15% interest advertised on his card. Instead he gets charged 340% interest and growing.
Let's not forget that the government DOES protect people from certain dangers. It's not a vaccuum out here. For example, the government has the FDA to regulate food and pharmaceuticals so that peopel don't get poisoned. The government has also made certain drugs illegal, and this protects the public as well. In fact, the government regulated credit too, until credit lobbying dollars convinced them to change the laws in 1978. Finally, if you want to talk about responsibility, don't credit card companies and mortgage lenders have a responsibility to only lend money to people who can pay it back (e.g. those with proper income...OR AT LEAST A JOB)? Unfortunately, lenders ignore their responsibility, lending money to college students who have no job and also not verifying the income of many home buyers.
In response to Brian L. -
Apparently no one even read the testimony. My intention was to do nothing more than present my case before the subcommittee. They were investigating, I kept good records. Also, had you read the testimony, I was 3 payments into a debt management program when Chase changed their mind about pursuing my debt. I do pay my bills and have spent years trying to do "the right thing." I was not in collections over this debt, it was just a simple account that contained plenty of examples of the practices congress was examining. Call me irresponsible all you want, but if you're walking down the street and Tito Ortiz jumps out of a dark corner and pulverizes you, is it your fault because you were too irresponsible to learn how to properly defend yourself? If you answer by pointing out that one activity is legal and one is not, then I will also indicate that there is precedent to indicate that the types of fees and overages I was charged are not a legal debt. Google Owens vs. Discover Card Services some time. And to take it a step forward if the only factor that drives your morality is legality, that would make you Level 2 Stage 3 of Kohlbergs' stages of moral development... The same stage as the majority of adolescents.
URLs for your viewing pleasure -
http://en.wikipedia.org/wiki/Kohlberg%27s_stages_of_moral_development
http://www.unc.edu/ncbank/Articles%20and%20Notes%20PDFs/Volume%2010/ConsumerCredit.pdf
(page 6)
“Tito Ortiz jumps out...”
Getting blindsided by a thug is a poor analogy. If you didn't knowingly accumulate the debt and knowingly make late payments then it might be a bit more apt.
I did read your testimony. I’m not going to defend Chase’s rejection of your attempt to reconcile through a structured debt management program. But, I do think it is reasonable for companies to assess fees and increase interest rates when terms of the agreement are not adhered to by the customer. When you make late payments or exceed your credit limit you then represent more of a risk to the company than they intended.
Thanks for implying I have the moral development of an adolescent. You’re assessment of my psyche is lacking. I in no way believe that morality is derived from laws, although many laws are derived from morality. In fact, I think that many laws that are consistent with my morality should be rescinded in order to preserve the liberties of those who might want to engage in activities that I disagree with.
Whenever you sign a contract it is supposed that you have read and understood the terms. Many people just do not bother to read the fine print and get into trouble.
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