Fight Arbitration Clauses

If you have ever signed a contract where you do not have the power to negotiate (the legal term is "Adhesion Contract"), you may have seen an increasing occurance of arbitration clauses. You are waiving your constitutional right to a fair and impartial hearing when you agree to arbitration. It is supposed to be cheaper than litigation in the court system, but that is not necessarily true. Also, the meetings are private. There is no public record of what occured in those meetings. In our court system, pleadings are recorded, which document the cases made by each side. Without this public record, it is easy for creditcard companies to get away with mistreating cardholders in these hearings. There is indications that this is exactly what is happening.

The Christian Science Monitor looked into this issue and found, "...the 10 most frequently used arbitrators - who decided almost 60 percent of the cases heard - decided in favor of the consumer only 1.6 percent of the time, while arbitrators who decided three or fewer cases decided for the consumer 38 percent of the time."

Do yourself a favor and take a look at the website givemebackmyrights.com and learn how to fight back, so that you don't find yourself being taken to the cleaners. If you are already in trouble with one of these contracts, find a consumer attorney.

Is The Federal Reserve Bank On Its Way Out?

In an interview, Jim Rogers, CEO of Rogers Holdings, an investment guru, tells an investment newsletter that the Federal Reserve is intentionally debasing the dollar. This means they are printing money with abandon, increasing the money supply and inviting inflation. Historically, when other central banks have done this, the currency becomes worthless. If the currency fails, the Federal Reserve will be a failed institution. This is an inevitable result of a fiat currency and an economy driven by debt.

Watch this interview on CNBC where he elaborates on the problem.

The Credit Score Scam

Most people think having a good credit score is necessary. This is the most successful marketing lie that exists in the financial industry. It only matters if you borrow money. Unfortunatey landlords, insurance companies, and various other companies have started using it as a guide. It is the lazy mans evaluation of a person's creditworthiness. Unfortunately, since there are so many errors on credit reports it has become an unreliable source of evaluating creditworthiness. Getting these errors corrected is a formidable task. While you are correcting them, more errors appear. It is a losing battle.

Despite what most people think, the credit bureaus don't work for consumers, they work for creditors. They will not accept any information from a consumer without undisputable proof, while the creditor just simply needs to make a claim and it is slapped onto your report unverified.

What's more, the scores themselves have now become a way to rip off consumers. There is the FICO Score (considered the standard), and then each credit bureau has their own proprietary score. They have started giving away "free" credit reports, which are little more than bait for subscriptions. The consumer thinks they are purchasing accurate information, when each bureau is likely to have vastly different information, and the score they give looks higher than the actual FICO score. There is a lawsuit in progress attempting to address this.

You even have to be careful about who you get your financial advice from. Suzy Orman is in bed with Fair Isaac and touts the value of a good credit score because she makes money when she does. However, Fair Isaac has recently settled a class action lawsuit against them involving Suzy Orman and her "FICO kit" for claims that they violated the federal Credit Repair Organizations Act and various state laws. They got away with providing "free" 3 to 6 month subscriptions. Ironic, since the FICO score marketing is all about improving your score, yet the scores continue to be fraught with countless errors, helping them continue to sell credit repair for their own mistakes.

The truth is that if you don't borrow money, the FICO score formula gives you a poor rating. In actuality, you are the lowest risk. Lenders who pay attention to what they are underwriting will see this. The score means little in the end with lenders who pay attention who they are lending to. As for the others, the landlords, the insurance companies, and employers. You can simply point out the errors and usually get past this screening. If you don't borrow money and tell them this is your policy, they should think highly of you regardless of the zero FICO score.

Creditcard Issued to a Tree

With all the talk these days about how irresponsible creditcard holders are with their irresponsible spending, running up large balances and tripping the "universal default" clause, we don't often hear about how irresponsible the banks are, and how we are manipulated by the system. There is a new documentary film out you should see about this.

A story confirmed on Snopes tells us about how a creditcard was issued to a tree called "Don't Waste A Tree". How does the creditcard company screen applicants? Or do they? As a parent, it is vital that we monitor our children's credit reports to make sure they aren't issued a creditcard. There have been cases, cited in Robert Manning's book "Credit Card Nation", where creditcard companies have attempted to sue parents for their children's debt when the parents were completely unaware of the account. He also tells of a case where a law student committed suicide because of the pressures of his creditcard debt, and complaints to colleges and legislators for the numerous documented cases like this are ignored.

Some of the Tricks and Deceptions You'll Find in Creditcard Agreements

You have read about the tricks creditcard issuers play, here is a list of some of them:

1. Constantly advancing due dates each month and other due date tricks. (Bankrate.com survey found nearly half of all credit card holders missed payments in 2006, the latest info available.)
2. Double-cycle billing, collecting interest on balances already paid
3. imposition of repeated fees for one single credit limit violation
4. Always applying payments to lower interest balances first, regardless of what came first.
5. Disclosure requirements are used to obfuscate, not to inform.
6. The typical agreement is over 30 pages of incomprehensible text, to discourage anyone from reading it, or understanding it.
7. Referencing complex and technical terms referring to interest rate calculations for pages, only to conclude that they reserve to change the terms at any time for any reason.
8. Bank of America, Capital One, Citibank, and J.P. Morgan Chase have all testified before congress that they will not engage in universal default, yet in Feb. 2008 issue of Money magazine observed the five major issuers (80% of the market) officially practiced it.

The agreements violate basic contract law, yet the courts will still enforce these provisions.

1. Using universal default and any-time, any-reason re-pricing.
2. Not giving fair notice of interest rate increases
3. Refusing to let card applicants read the terms of the agreement before the card is issued, and hiding material terms from the language of the agreement through open ended clauses.
4. Redefining the ordinary meaning of terms such as "fixed rate" and "prime rate" to deceive cardholders with hidden meanings.
5. Unlimited ability to change the credit limit without the consent of the customer.

(Most of this data is taken from Elizabeth Warren's Testimony before the House Representatives March 13, 2008.)

Sound reasonable enough to carry a credit card? Think they'll never enforce those terms? Think again. These companies will charge a late fee for a payment that is one day late, default the account under universal default terms, and raise the interest to the default terms. If that puts the account over its credit limit, they charge over limit fees - all for a payment that is credited to the account one day late, sometimes at the negligence of the creditcard company themselves.

Consumers Are Denied A Hearing in Congress

There was a recent hearing in congress about credit card abuse, to talk about a bill for additional consumer protection. It would be very educational to read Elizabeth Warren's testimony. (Adobe Reader required) This was in the House, it is just as bad in the Senate. A number of years ago Louis Freeh lied about MBNA's universal default policy in his sworn testimony before the Senators, acting as the General Counsel for them, and no one cared. See a previous post on this blog about it.

The surprising thing about this hearing (or maybe not if you realize how corrupt congress is) is that there were consumers there who flew to Washington to testify at the hearing about the abuses of the credit card companies. They were not allowed to testify without providing unlimited disclosure of their account activity with the credit card company. That might seem fair on the surface, but the request to ask the credit card companies to back up their claims with documentation was denied. Elizabeth Warren writes about it here.

Are you sure you want to do business with these guys? Are you sure that credit card agreement is not a threat to your financial and legal security?

Think Credit Card Companies Care About Identity Theft?

Take a look at this series of articles and watch John Hargrave prove that Citibank fails the test on fraud protection. Credit Card Criminal, Part 2, Part3, Part 4. John Hargrave is also the guy who did the Credit Card Prank which showed that no one pays attention to credit card transactions.

I had a company that I do business with try to convince me that I should use a credit card for protecting my identity, and do all my transactions on-line with them. Naturally, I refused. But I discovered that a lot of people think that the reason to use a credit card is because they have such good fraud protection. So, I will be sending them to this website.

Consequences of a Credit Based Econony

Yesterday, gold, platinum and oil made all-time highs. This morning, the London A.M. Gold Fixing posted an all-time high of $865.35. It may surprise you that gold, platinum (which is called "the white gold") and oil (called "black gold") are appreciating substantially.

Most of us do not know that the increase in the broad money supply, which is called "M-3," is no longer reported by the government. So the Government and the Federal Reserve are trying to hide what they are doing. Very few people understand that the money supply expanded over 16% in 2007, which is greater than at any time in nearly 50 years. Furthermore, most investors do not want to understand how monetary inflation precedes price inflation and that the greater the monetary inflation the greater the price inflation. Obviously, a dramatic or persistent price advancement in gold and oil will cause investors to take notice.

Uncle Sam is churning out dollars in an effort to ward off a recession. Foreign central banks are pumping out paper to keep their own currencies competitive with the dollar. The great global competitive currency devaluation is coming. When you consider this extraordinary monetary inflation now being generated by central banks, it is hard not to imagine extraordinary price inflation sitting right out on the horizon.

Should it be a surprise that gold and other precious commodities such as platinum and silver, which are known as a safe havens in these times, will see higher prices?

Banks Are Proving To Be Bad For Consumers

Did you know that Bank of America collected more than 22.4 Billion in fees, which includes penalty and service fees and other non-interest income, in 2006? That is more than half of it's overall revenues! The "sweet spot", as the spokesman for the banking industry put it, is these fees. So when you open a credit card account or even a checking account at a bank, you need to realize this. You will get slapped with unexpected fees. That is how they make their profit these days.

Time to consider changing to non-profit credit unions for all our "banking" needs. They are owned and controlled by the members who open accounts there, and serve the interests of the account holders. Their whole purpose is to provide reasonable rates and a safe environment to keep our money, as opposed to banks who are robbing their accout holders.

Generosity

I've talked a lot up here about the warnings of borrowing money. It is clear that in today's world, it has become a trap. What I have come to learn over the years is that borrowing money is a symptom of wanting things before you can afford them. It is also a symptom of selfishness. We should be helping others in need, not lending money to them at high interest rates, or any interest rate at all.

Materialism is the disease, generosity is the ancdedote. There are people who find themselves in debt due to medical bills. This is the cause for half of bankruptcies. This wouldn't happen if we, as a community, helped those in need. Instead, we are letting these people borrow money to stay afloat, and they fall into the debt trap. Under the new bankruptcy laws they are likely to not be given the opportunity to start over when they cannot afford to pay for a bankruptcy, or fall out of bankruptcy and lose the protection from their creditors due to the unrealistic and unforgiving repayment terms according to the law. What we need to realize is that it is only by the grace of God that we are not in that situation ourselves. Healthcare is expensive, and without very diligent financial planning for emergencies, we are only 30 days away from a downward spiral into the trap. Even then we can't do it alone. We need to learn to help others in need, so when we are in need, someone will help.


1 John 3:17-18
17 If a rich person sees his brother in need, yet closes his heart against his brother, how can he claim that he loves God? 18 My children, our love should not be just words and talk; it must be true love, which shows itself in action.
TEV

This is OUTRAGEOUS!!!

Creditcard companies are targeting children as young as 9 years old now. Look at this new game from Hasbro. This is child abuse!

Elizabeth Warren Talks About the Creditcard Industry

There is an excellent interview on Fresh Air that will give you some pretty shocking information about creditcards. Go here and listen to this interview! Elizabeth Warren is a Law professor at Harvard University, and has done extensive research on Bankruptcy and has advised those in Washington about the bankruptcy laws.

Time to Do Something

I have done a lot of complaining on this blog, but my purpose is to inform. There is no reason to obsess over the injustice. There will always be injustice. So what do you do? The best way to fight back is not to try to change our government policies, our government's ability to make good decisions for the people has dimished significantly due to the influence of money and power, and the apathy of voters. The solution lies with each and every one of us as inidividuals. We vote with our pocketbooks. If we use creditcards and we borrow money in any way shape or form, we vote for the current ways our banking system treats us. If we live on cash, we send a message that we don't need creditcards or loans. As much as we think we do... some of us are discovering we can live much better without them.

If you want to know how to do this, one of the most simple and understandable ways to make this change effectively in your life is just to change your spending behavior. Your behavior changes once you have admitted there is a problem and you know what to do about it. Nothing works better that I have found than Financial Peace University. I get nothing for this referral. I have used the program myself and it has changed my spending behavior, and improved my relationships. Go to the link and check it out.

BofA issuing credit cards to anyone who breaths

Still think credit cards are not abusive by intent? InsideARM.com, a website supporting the collection industry, reports that Bank of America is issuing credit cards to illegal immigrants. Here is a quote from the article:

Quietly, and without much fanfare, Bank of America has implemented a program
offering credit cards to customers without a social security number. This courting of the undocumented isn’t new. In recent years, banks and lending institutions nationwide have offered checking accounts and, at least, once upon a time, before the housing bubble burst, mortgages. What undocumented citizens haven’t been able to do easily, if at all, is procure credit cards. No credit cards mean, usually, limited or no credit history – severely limiting the purchasing power of the undocumented.

The credit cards in this new program at Bank of America start with an interest rate of 21 or 22 percent interest rate. These poor immigrants don't have the sophistication to realize that these interest rates can quickly undermine their ability to provide for their basic needs. Not only is this program abusing the poor, it is seeking to aid people in breaking the immigration laws.

Abusing Collectors

Collectors seem to be able to dish it out but can't take it. Take a look at this article. The district attorney for Araphoe County in Colorado seems to have mistreated a collector. The story is that a debt collection attorney for Central Credit Corp. Jonathan Steiner alleges that he was threatened by Chambers with a grand jury investigation when he tried to recoup some bad check funds from Englewood City Councilwoman Laurett Barrentine, a member of Arapahoe County's Republican Party. Barrentine claims that the bad checks were a result of identity theft, and that she is not responsible for the $320 dispute. Central Credit Corp. dropped the collection account against Barrentine – primarily from threats of the aforementioned grand jury investigation. After filing a complaint, now the district attorney faces possible discipline ranging from a reprimand to disbarment. Its nice to know there is still justice, isn't it?

Another Reason Open Creditcard Accounts Can Ruin You

Consumer Report’s reveals things you might want to know about your financial privacy:

• Data brokers are willing to sell even your most sensitive information to paying customers, some of them crooks.
  
• When credit bureau employees asked to see their own files, they received scant information. One report contained 31 errors.
  
• The federal government is a steady customer of the data collectors, but there’s no way to know what it collects or exactly how much it pays.
  
• Pretexters, who lie to get information about you and sell it to anybody, operate largely free of regulation.

Congress Giving Collectors More Power

Patrick Lunsford of collectionindustry.com is reporting, "Changes in the FDCPA have been approved by the U.S. Congress and sent to the President to sign into law. The amendments were part of the Financial Services Regulatory Relief bill which was passed this weekend.
Some of the key changes include clarification around “mini-Miranda” disclosures and legal codification that allows agencies to collect during the 30-day validation period. " The industry already practices collection during this period, but this change in the law makes it legal. Yet another reason to stop borrowing money, and avoid medical catastrophes at all costs. Soon those who rack up so many medical bills that they must file for bankruptcy, will have no relief and will be hounded by collectors for a lifetime unless they are fortunate enough to find someone else to bail them out. Creditcards no longer carry risk for the lender with the collection power congress is granting.

Creditcards are more important than religious freedom?

"Thou shalt have no gods before me ... except for MasterCard, Visa and American Express.
That's the way the United States Bankruptcy Court for the Northern District of New York is reluctantly interpreting the controversial U.S. bankruptcy reform law that went into effect last October. The court says those going through bankruptcy may not tithe to their church or make other charitable donations ... until after they have paid off credit card companies and other creditors. Before the new law went into effect, bankruptcy court judges were required to permit debtors to tithe a portion of their income on a regular basis. The 2005 law could have a major impact on the large number of Christians and members of other faiths that are called upon to tithe a portion of their income on a regular basis. More than two million Americans filed for bankruptcy protection in 2005, and hundreds of thousands will do so during 2006. " says a report on collectionindustry.com.

This is an infringement on religious freedom. They are rewriting the laws of the Old Testament. Seperation of church and state is being used to build the profits of creditcard companies.

Need a Reason to Avoid Creditcards?

If you aren't convinced that you need to avoid creditcards and all debt, for that matter. Read this recent series in the Boston Globe.
No Mercy For Consumers
Dignity Faces a Steamroller
Enforcers' Might Goes Unchecked
Regulators, Policy Makers Rarely Intervene

If these articles make you realize the outrageous nature of the power of lenders today, write the Boston Globe and let them know what you think about the articles. Also forward copies to your representatives in Washington and let them know what you think of their lack of responsibility for protecting citizens from injustice.

Creditcard Issuers Still Fighting to Rip You Off

There is currently legislation being considered that would take away more of your consumer protection against the shennanegans of credit card companies. Take a look at this. In case I didn't tell you, creditcards are the ticket to bankruptcy, even if you are financially conservative.