Wednesday, April 27, 2005

Taking Your Promises Seriously

Last month I decided to take a closer look at one of the solicitations I got in the mail. I noticed that the disclosures required on credit card offerings form a contract when you sign the application. I had been reading about oaths in scripture and found one particular scripture that hit me. Ecclesiastes 10:1.

Waive Constitutional Rights for a Car Repair?
As I reflected on this scripture, and related it to how I went from a respected successful small business owner to one that is called a "deadbeat" that can't pay his bills. I made a few seemingly insignificant and common decisions to open a set of credit card accounts to facilitate the way we conducted business. Like the vast majority of people I hadn't read my credit card agreement in detail, and didn't realize what kind of risks I was taking with my personal finances. I remembered this yesterday when I dropped of my car at the dealer for service. I pay with cash now, but when I left it there was an entire contract on the back of the estimate that I realized I must read and agree.

It amazes me how signing these complex legal agreements have become so insignificant to us. We sign without a second thought. Many have an arbitration clause. My friend, strike it out before you sign it, or at least ask the attendant if there is an alternative to waiving your constitutional rights in order to get your car serviced, get medical treatment, open a checking account, or some other common activity.

Personal Responsibility
We need to take every agreement we sign seriously, as if we are going to be challenged by the terms we have agreed to. This is one reason credit cards can use the "personal responsibility" mantra, it takes attention off their unfair business practices. If we did take more "personal responsibility", we would preserve our reputations, and it would bring contractual abuses to light. It takes years to build a good reputation and one weak moment to destroy it. That is the point of Ecclesiastes 10:1.

Common Mistake
How do I know that few people read their credit card agreements before they agree to them? Over 78 million people have credit card accounts. The average household has $8,000 in credit card debt. On the credit card application is an agreement where you promise to be bound to the contract they will send with the card in the mail. Now tell me, how can you read a credit card agreement and agree to it if you don't have it yet? You are agreeing to something you have no idea about. You could be agreeing to sell yourself into slavery.

Common Deception
Why do the credit card companies do it this way? They don't want you to see the contract until you have the credit card in your hand, and they also get all your personal financial information in their database, including everything on your credit report. What did you get in return? A credit card with an agreement that is highly abusive in it's terms. If you read it, or took it to an attorney so you could understand it, you would cut up the card and close the account if you took it seriously.

I decided to file a complaint with the Office of the Comptroller of the Currency on this issue, and the initial response was that it was reasonable to expect to see the credit card agreement in advance of filling out an application. Credit card companies don't do this and refuse to let you see one in advance of filling out an application. Their investigation takes about 60 days. I'll keep you updated.

If you would like to file your own complaint on this issue, you can reach one of the Office of the Comptroller of the Currency's customer assistance specialists by: Telephoning 1-800-613-6743, toll-free (Monday-Thursday 9:00a.m. to 4:00p.m.CST) E-mailing - E-mail to; Fax - Faxing to - 1-713-336-4301 or; Sending mail to - Customer Assistance Group1301 McKinney StreetSuite 3710Houston, TX 77010

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