Posts Tagged ‘credit card’

JPMorgan Pulls Arbitration Clause From Card Contracts

Wednesday, November 25th, 2009

JPMorgan Chase & Co.’s credit-card contracts will no longer require disputes to be settled through arbitration, a practice that lawmakers said was biased against cardholders, to help settle an antitrust lawsuit.

After a class action suit was filed by Philadelphia based law firm, Berger & Montague PC, the company stopped using arbitrators in July. Lenders including Bank of America, Citigroup Inc., Discover Financial Services and Capital One Financial Corp. secretly met or consulted for the purpose of requiring their cardholders to arbitrate all disputes.

Read the full story here:
JPMorgan Pulls Arbitration Clause From Card Contracts

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Posted in Credit Card Debt, Stop Debt Collectors | No Comments »

Credit Card Companies Respond to Consumer Protection Bill

Monday, October 12th, 2009

Credit card companies are taking action ahead of the new Credit Card Consumer Protection Bill that will take effect in February of 2010. The bill was passed in May of this year and limits the ability of a credit card company to raise interest rates and late fees. The new law forces credit card companies to simplify their terms so that consumers don’t get hit with the unexpected rate or fee increases.

The banking industry lobbied against the bill, saying it could limit credit at a time when the economy is already struggling with a credit crunch. However, credit card companies make most of their profits off of consumers who go too far into debt or fall behind on their payments. In response, some credit card companies like Bank of America, Chase, Citigroup and American Express began going after consumers with a solid credit history.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

Read the story on CNN about the bill and a couple who had Chase bank raise their interest rates despite having good credit, here.

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Posted in Stop Debt Collectors | 2 Comments »

Debtor’s Revolt: But at What Cost?

Thursday, September 17th, 2009

Many may be familiar with the YouTube video posted by Ann Minch, a California woman that grew enraged after Bank of America raised her credit card’s interest rate to 30% after she had been a loyal customer for years. The Huffington Post recently covered Ann’s storing in their article Debtor’s Revolt: Woman Refuses to Pay Off Bank of America Credit Card. Unfortunately, these situations are all too common. You can see the video here:

It seems so simple.  The woman is basically saying I am going to penalize you, Bank of America for raising my interest rate again.  But is she really making things more difficult for Bank of America, or for herself in the long term?  She knows she is going to get numerous calls from debt collectors, but does she realize there will be a permanent judgment against her if she does not pay the debt?  And does she realize that although she does not have a job right now, they could garnish future wages and/or any and all bank accounts she will will have in her possession now and in the future?

Plus, if you are in default with one credit card, expect to see the interest rate rise on the others.  They are within their rights to do this.  What is starting out as a mild snowball could turn into an avalanche and literally ruin her credit and her finances for many, many years to come.

So what should she do?

1) Write an open letter to her State Representative and cc the executives at Bank of America.  Be belligerent and persistent with the State Rep; debt collection practices this is a huge issue currently being discussed in Washington DC.

2) Take a look at the agreement with Bank of America  to find out if there is an arbitration provision provided.  She may be entitled to a free dispute which will require Bank of America to explain why they raised her interest rate.

3) Once she moved to the new bank with her savings, she should ask the new bank if they are willing to open a credit card for her at a lower interest rate and to transfer the entire balance over.  Then, she can close the Bank of America card and avoid debt harassment permanently.

4) Once this pops up on her credit report (and it will) she needs to contact the credit reporting boards at Trans Union, Equifax and Experian regularly and report that the issue is being disputed because Bank of America raised the interest rate without cause.  if it is being disputed, it cannot affect her credit.

I recognize that the woman is upset and I am not saying she does not have reason to be, but she is handling this entirely the wrong way.  At CreditLaw.com, we’ve helped many consumers protect their rights, stop collection calls and address their debt using fair debt collection practices. While in the short term it may feel better to exercise one’s frustration by starting a “debtor’s revolt,” but sacrificing one’s financial future simply to make a point does not make sense. She needs to strategize and move forward.

Craig Thor Kimmel
www.creditlaw.com
1-800 NOT FAIR

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Posted in Credit Card Debt | 11 Comments »

The Attack of The Zombie Theft

Wednesday, September 16th, 2009

It happened years ago…so far ago that you erased it out of your mind.  Your wallet was taken off the movie counter when you were buying popcorn, your number was lifted off of a gas station receipt, or your credit card was taken out of your purse when it was hanging over your chair at the local diner.  You didn’t know the credit card was gone immediately; it wasn’t until you saw that $1500 credit card bill for clothing you didn’t purchase that you realized you were robbed.

At that point, you immediately contact the credit card company to report the card stolen.  They understand and tell you that you will not be responsible for the charges.  Thank goodness, you say with a sigh of relief.  Life goes on.

Then, one day out of the blue, you get a call from a collection agency that claims that you not only still owe the original $1500, but also owe thousands of dollars in interest.  According to the collection agency, there is no record of the theft and they warn you that if you do not pay back the debt ASAP, your credit will be permanently ruined, and even worse, they will look into legal action to recover the monies.  How can this be?  What is going on?

The debt lives and even though the company did write it off, a collection agency purchased it and is trying to wring the money out of you with the threat of knocking down the credit rating you have worked so hard to build and achieve.  These debts, and all the personal information that accompany the debts, are purchased for anywhere from a fraction of a penny to twelve cents on the dollar. The collection agencies will then do anything they can to get as much of this money, including making empty threats and at times harassing consumers into paying just to be left alone.

So what do you do?

Keep records–if you are the victim of identity or credit card theft and you find that there are charges attributed to your name, you need to keep track of the crime.  Police reports, written letters to the credit card company with a certified receipt attached, phone logs of credit card employees…all of these items could be very helpful.

See if you can get a written letter from the creditor releasing you from your debt.

Lastly, keep these records in your file cabinet in case the debt ever comes back to haunt you.

If you find yourself in this type of situation, and you are receiving countless calls from collectors trying to make you pay this debt, fight for your rights and call 1-800 NOT FAIR or drop us a line.  We would be glad to discuss the situation with you to see how we can help.  Our service is 100% cost-free.

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Posted in Stop Debt Collectors | No Comments »