Streams

Predatory Assistance

Tuesday, November 25, 2008

Anya Kamenentz, staff writer for Fast Company, author of Generation Debt and the Generation Debt column at Yahoo Finance talks about the pitfalls of using a for-profit load-modification company.

Guests:

Anya Kamenentz

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Comments [49]

insurance

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Mar. 06 2013 11:47 PM
david from red hook (north)

I am shocked to hear similar stories to my own experience with regard to closing a high interest credit card. I paid in full the balance of a card that went up to 31.99% (because of the "two late payments in one 12 month period" trigger, one of which was a non-credited electronic payment made on a sunday) After double checking the due dates and paying in cash in full,the next months statement showed interest on some calculated balance. When I called to speak to a supervisor, I was told there is no such thing as a zero balance!!!! The story changed with each successive representative until I got the right person who simply said," oh, I can take care of that " (removing the interest)

I feel something needs to be done about the way these card companies( major banking institutions)run their business. And interest approaching 32% is criminal.

Get rid of your cards.

Nov. 25 2008 11:01 PM
Diane from Long Island

Response to Voter from Brookly re AMEX

The account I had with AMEX was a credit card, but when they found out I was unable to make the monthly payments they closed the account and advised me they did not work with any credit counseling agencies and referred me to their customer service assistance dept. Before I could contact them I was sent a notice that the balance was due in full, a day later a collection agency called me to make payment arrangements. Meanwhile, I am charged 30% interest, $39 a month late fees and pay $100 a month on a $2000 balance that will never be reduced under these terms.

Nov. 25 2008 03:29 PM
Edward

John #36,

The problem with debit cards is that they are a nightmare when it comes to fraud. With a credit card, you pretty much always get an instant provisional credit is cases of fraud. With a debit card, they typically won't give you your money back until they complete the investigation which can take months. Your bank may have a different policy, but it's something worth checking on.

Nov. 25 2008 12:00 PM
Vanessa Alleyne from Montclair, NJ

I was sent credit cards from American Express, Gulf, and Bloomingdale's WITHOUT APPLYING when I graduated from Harvard some 25 years ago. Each came with a 'congratulations Harvard graduate' kind of letter.

This was, of course, the beginning of the real crack epidemic. I got hooked and proceeded to use, abuse, and become dependent on the cards until I lost all three. But by then I was on to bigger cards with names like MBNA and gold this and platinum that. Switching cards, trading balances, chasing payment deadlines, trying to make the minimums -- kept me running, ducking, and dodging for a good many years until it crashed when my biggest card cut me off. I went into withdrawal -- cold turkey -- nervous, ashamed, shaky, and just generally feelin bad. Then, slowly, but surely, without the salvation of my biggest dependency to fall back on, I began to recover and to see that life without the cards was really not the end of the world after all as I had believed for so long. In fact, now, six years later/sober, I've never felt more clear headed and strong. I have debit cards. I have a budget. I know how to save. I buy what we need in our family. We take vacations. My kid has clothes, books, and toys. We eat well. Life is good. My corporate crack addiction is over.

Nov. 25 2008 11:59 AM
Gene

Thanks for that extra info, Anya. And the interview!

Once again, Brian (or Leonard, who can tell the diff?) focuses on an issue we all need to be more concerned with.

Nov. 25 2008 11:56 AM
Anya Kamenetz from Brooklyn, NY

The National Foundation for Credit Counseling is at
http://nfcc.org/
In New York City they list Greenpath Debt Solutions
http://www.greenpath.com/
And Money Management International. http://www.moneymanagement.org/

For more information on the Credit Cardholders' Bill of Rights:
http://www.creditslips.org/creditslips/2008/02/the-credit-card.html

It passed the House in September, sponsored by New York's Rep. Carolyn Maloney. Let's make sure they don't forget about it.

Thanks for having me on!

Nov. 25 2008 11:41 AM
Voter from Brooklyn

#39 - Diane,
Is that on a credit card or a charge card? Not that I'm justifying it, but I can see why they would be that way on a charge card where it is implicit the balance will be paid in full monthly.

Nov. 25 2008 11:41 AM
Anya Kamenetz from Brooklyn, NY

The National Foundation for Credit Counseling is at
http://nfcc.org/
In New York City they list Greenpath Debt Solutions
http://www.greenpath.com/
And Money Management International. http://www.moneymanagement.org/

For more information on the Credit Cardholders' Bill of Rights:
http://www.creditslips.org/creditslips/2008/02/the-credit-card.html

It passed the House in September, sponsored by New York's Rep. Carolyn Maloney. Let's make sure they don't forget about it.

Nov. 25 2008 11:39 AM
Cindy from Brooklyn

We have found that if you call and threaten to close your account, the companies will immediately lower your rate. (Sleazy of them, but true.) My elderly mother was being charged an astronomical rate by Amex and I called them and told them they should be ashamed and they actually immediately lowered her rate. Also, my husband just shifts balances from card to card depending on who's offering the best deal.

Nov. 25 2008 11:37 AM
Diane from Long Island

If you ever fall behind in payments, AMEX is the worst creditor to deal with. They do not work with any credit counseling services, they do work with a collection agency, continue to jack up the interest rate, charge you a late fee and whatever else they can get from you. Not a user friendly creditor for these tough times at all.

Nov. 25 2008 11:34 AM
Voter from Brooklyn

Amy #22,
The text on my BoA letter was, I’d say, pretty readable for my relatively young glasses assisted eyeballs; maybe slightly smaller than the size of the “insert this way” text at the bottom of a metro card. It was on the back where you’d be lease likely to look, but it wasn’t tiny. It’s not really the size of the font, but the way it is written. Within 30-60 days, a 0% rate on cash advances and balance transfers can become 28%.

Nov. 25 2008 11:33 AM
Edward

I had a problem with my Sears credit card -- which is really Citibank -- last spring. I was told on the phone that they couldn't help me, and that I would need to send a fax to their offline complaints department. There's no way to reach this group other than fax -- no email, no phone. I sent the fax.

Two weeks later I get a letter asking me to call in with more information. It's the same number I called in the first place. They still can't help me at that number and ask me to send a fax.

http://en.wikipedia.org/wiki/Klein_bottle

Nov. 25 2008 11:30 AM
John Hannon

I only use my card as a debit card and this avoids the entire issue of payments. This option does not discussed much and I am not sure why.

Nov. 25 2008 11:30 AM
jeff from ny

USAA is the best financial institution I have ever dealt with. If you or your spouse is a veteran, or a parent (or step parent!), check USAA.com to see if you can become a member. They are a non-profit financial institution with banking, insurance, mortgages, and a lot more, and they're great. I have a credit card, bank accounts, car ($40/month full coverage!) and renters' insurance, and I will definitely get a home loan when the time comes.

Nov. 25 2008 11:29 AM
pordy from Florham Park

Beware of the "fixed APR for life" rates (I've successfully used them to pay off cars and even student loans for 2-3% over 3-4 years- just transfer balance and never use the card for anything else). Lately though, the offers have fine print that requires you to use the card. Once you do, whatever you charge is paid off LAST at whatever ridiculous rate they set (my solution would be to charge $.10 at self-check out at Home Depot ;)

Nov. 25 2008 11:26 AM
Robert from NYC

AmEx also good as credit card, lower APRs and protection too. At least to date that's the case.

Nov. 25 2008 11:26 AM
Carola from BROOKLYN

Like the recent caller, our interest rates were raised by two banks on business credit cards for which we had never been late or missed a payment - based solely on our credit report showing high outstanding balances - Chase to 29% and Advanta to _35_% !!!

I heard several weeks ago that Sen. Obama voted against the credit bill of rights that was just said to have passed - anyone know any more on this?

Nov. 25 2008 11:25 AM
Diane from Long Island

Several of my credit card companys raised my interest rate to 30% based on my credit report. Including creditors who I have always paid on time. I tried to negotiate the rates so I could continue making on time payments to no avail. In April I signed up with CCCS and guess what I now pay as between 5 and 12% interest on all my credit cards in the program. Yes enlisting the help of a credit counseling service will mark your credit report but not as bad as bankruptcy.

Nov. 25 2008 11:25 AM
Gene

I've hated BofA since the 60s, when there were two major banks in CA, Security First and BofA. I quickly found out that while SF wasn't exactly consumer-friendly, it was far, far better than the rapacious and unconscionable BofA.

The instructional horror stories on this board are nothing new for BofA.

These bailouts are like solving the hen-loss problem by supporting the foxes.

Nov. 25 2008 11:24 AM
adsf

believe it or not, compared to credit default swaps this is legit! innovative! for banks...this is the stuff their thought leaders spew at consumer banking conferences!!!!!

Nov. 25 2008 11:24 AM
Torkil Heggstad from Brooklyn, NY

The debt consolidation letters may seem bad, but compared to the credit card companies, it is not necessarily that bad. What would be great, is if there was some way to consolidate the debt against a hit to your credit rating that would be removed as you pay off your debt. That would be a great federal program.

My bank of 12 years is not willing to convert a dime of my credit card debt to a personal loan so the banks can't be used.

Nov. 25 2008 11:23 AM
Heilene from brooklyn

As consumers we should decide to use these cards as little as possible: Travel and deposits -- nothing more.

I have a card from B 0f A and I have noticed that not only have they moved the due date up that they are sending me checks to write against my credit card. When I was younger I got myself into trouble with these "conveniences" but no more. As consumers and as citizens we need to insist on credit card reform if we are giving them our taxpayer money to bail them out.

Nov. 25 2008 11:23 AM
Voter from Brooklyn

Oh, and my payment date (on a card that now has less than $10 on it) was moved forward one business week from last month's payment date.

Nov. 25 2008 11:23 AM
Janette from Inwood

Something I found interesting. I call my credit card company regularly to ask for a lower APR. The last time I called I was told that I could only get a lower APR if I opted out of the Points Program. Easy choice for me - I never asked for the points program to begin with. Moved my APR from 12 to 9%.

When I cashed in the points that had been accruing for years - I received a battery recharger. When I think of the interest I paid for that... should be plated in gold.

Nov. 25 2008 11:23 AM
Robert from NYC

So where is congress and the laws against this? Where are they!!!!

Nov. 25 2008 11:23 AM
Andrew Saunders from brooklyn

Also check your bank statement for erroneous fees. I was charged an atm fee by citibank for taking money out of a citibank atm. They are desperate.

Nov. 25 2008 11:23 AM
Amy from Manhattan

Just wondering, how big is the type on the BoA letter that says the interest rate can jump to 28%?

Could financial institutions that do this be made ineligible for bailout funds, so the federal gov't. can do something about it even though they're located in a state where it's legal?

Nov. 25 2008 11:22 AM
Jon from Glen Cove

wouldn't much of America's financial problem be solved by limiting finance rates to a maximum of say 5%, or even 2% for all loans?

Nov. 25 2008 11:22 AM
david from NYC

Brian, I had a checking account with Commerce Bank the biggest banking crooks in NYC, I had check payment that came in electronically and the bank would usually honor a check if your balance is below $5.00 on this particular day I was not aware my account was minus $0.25 cents they decided to dishoner payment and kept dishonering payment and ended up charging me almost $400 in fees I tried to speak the higher ups in the bank they have ignored me never returned my calls and reported me to the credit agencies.

Nov. 25 2008 11:22 AM
Karen Smith from Tribeca

Question:

I don't ever carry a balance on my credit cards and if possible, I use my AMEX as a debit card which I pay in full monthly (because they're so good at protecting my purchases). Do I need to worry about interest rate percentages or fees?

Nov. 25 2008 11:22 AM
hjs from 11211

sounds like a good deal unless u plan to miss ur payments

Nov. 25 2008 11:22 AM
Voter from Brooklyn

I just had a pretty aggravating phone call with a BoA representative yesterday over semantics. The balance on my card was paid in full last month, but I got a statement this month showing interest supposedly estimated but not calculated into the previous balance because of the date the payment was made. The representative maintained while the total was not “accurate” the account balance reflected on my account was “precise.”
Also, I get convenience checks from BoA twice a month encouraging me to write checks out to cash, which could result in a 28% interest rate if a payment on the cash advance is missed.

Nov. 25 2008 11:21 AM
superf88

This is pretty much the only way that banks can make more money than buying at 5 and lending at 7. (other than bailouts of course)

Nov. 25 2008 11:20 AM
Sherry from Jersey City

Hey,
I just checked my last credit card bill...and WNYC charged me for my membership fee 3 times!!!

Nov. 25 2008 11:20 AM
Jon from Glen Cove

The other trick they use is that even with regular payments , they change the due date on you! Happened to me with automatic transfers from CitiBank ot Citifinancial. Once even claiming that my Saturday electronic payment from Citibank did not clear Citifinancial until MOnday, even though Citibank already debited the amount on Saturday!!

Nov. 25 2008 11:20 AM
Louisa McCabe from Brooklyn

Our Amazon Visa has quietly gone up to 44% APR.

Nov. 25 2008 11:20 AM
Robert from NYC

It's interesting that the right wing holier than thou members or both houses are in cohouts [sp?] with these sharks and after Jesus threw the money lenders out of the temple and usury is one of the seven cardinal sins. How ironic and low is that!!

Nov. 25 2008 11:18 AM
Wendy Wilson from New Jersey

My mother had that credit protection from Bank of America and when someone stole BOA checks from her and cashed them at BOA over a period of 18 months, BOA refused to help us at all. We had to identify the fraudulent checks, pay for the copies and work through their bureaucracy. They ended up denying the claim because my somewhat befuddled mother had not reported the problem when it first started. They are not on my happy customer list. I transferred my credit card to someone else (probably equally problemmatic).

Wendy

Nov. 25 2008 11:18 AM
tom from ny

bank of america jacked my credit card apr to 28.99% for one late payment. i paid the account back to 0 and haven't used it since.

Nov. 25 2008 11:18 AM
KC from NYC

Doesn't Bank of America own MBNA (or vice-versa), the company that most likely controls your credit card, regardless of the bank name on said card?

I wish our new Vice President wasn't so tied up in this stuff. He really is, though, having championed the Bankruptcy Bill as a favor to his predatory-capital-of-the-world home state of Delaware. He even killed a provision that would have relaxed bankruptcy regulations on military personnel serving overseas. Bad news.

Nov. 25 2008 11:16 AM
Robert from NYC

Are you really surprised? REALLY!!? C'mon I had an ordeal with Bank of America and they did all they could to rip me off so I cancelled my credit card by writing a letter and sending pieces of the cards and telling them they were worse than the Mafia and I meant that. BoA IS really Mafia-like organization that should...no MUST be avoided. The next month after my letter I got another statement as though I had not cancelled the account and then I sent another letter and really raised hell. To this day the statements stopped but they consider the account open.

Nov. 25 2008 11:15 AM
Jennifer from manhattan

forget predatory loans, look at predatory credit cards period: yesterday I got a "notice of change of terms" from Citibank for my credit card, advising me that they would be "increasing the default APR to equal the greater of (1) the US Prime rate plus 23.99% or 2) up to 29.99%. As of OCTOBER 1 2008 this APR is 29.99%."
One can opt out, but have to pay in full. I do this all the time, but most do not. This is an outrage -- particularly considering that we are "bailing out" this company!

Nov. 25 2008 11:15 AM
superf88

ps -- credit card cos make their $ from the high interest rates, no surprise there -- their move is to shift the monthly payment dates. So you can't simply pay "on the first" and assume you have paid.

Nov. 25 2008 11:15 AM
superf88

We can thank South Dakota and Delaware for that 23 or 27% interest rate -- those 2 states legalized what some call "loan sharking" which is how they attracted the major banks.

In one fell swoop Obama could REALLY fix the economy -- by bringing laws back into line with morality.

Any powerful Dems from DE and SD you can think of to call about this, Barack?

Nov. 25 2008 11:14 AM
Gene

MUCH of the credit card debt today is because of JUST such predatory, usurious practices that the banks have been able to push through our bought-and-paid-for Congress for the last 20 years.

This is absolutely nothing new. In fact, allowing 2 late payments is positively enlightened, compared to normal late credit card payment fees over the last 8 years.

Nov. 25 2008 11:13 AM
hjs from 11211

he just wants off wednesday!
and it's we who suffer.

Nov. 25 2008 11:13 AM
Dylan from Astoria

That variable APR and raising the rates to close to 30% clause is a part of any credit card agreement. They can even raise the rate if you make late payments / incur fees (account overdraft) on any bill. Some companies just won't invoke those clauses for 'good' customers.

Nov. 25 2008 11:13 AM
judy from NYC

You sound fine, Brian.

Nov. 25 2008 11:09 AM

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