(originally posted at the Credit Terrorist Training Camp, reproduced here for your amusement)

With the current recession and credit crisis, the news media is beginning to note a cosmic shift in people's attitudes towards credit. No longer are credit cards being looked at as a universal necessity - they are once again being looked at as a luxury.

I am also seeing a shift in attitudes on both sides of the equasion. Loyalty is history. Lenders, who used to value long term relationships with their customers are now looking at their customers as cash cows and when the cow doesn't give enough milk it is sent to the slaughterhouse to be turned into hamburger through rate jacking, credit line decreases or simple unannounced account closures.

I remember the days when bankers encouraged you to have a long term relationship with them. My Debit Card attached to my bank account still reads "customer since 1996", but my credit cards no longer do. American Express still does that, but after a rate jacking and 4 credit line decreases in six months on an account that was never delinquent by one dollar or one day that account was closed within 14 months of its opening. Amex made no attempt to keep me as a customer and actually paid thousands of their customers to go away. The other credit card companies are in the same boat. Citibank made no attempt to salvage our relationship, neither did GEMB.

It is easy to ascribe this to the current credit crisis, and that is probably a correct assumption, but what is happening to the concept of "loyalty"? Loyalty is a component of trust, and the credit industry is built on trust. Lenders trust borrowers to repay and borrowers trust lenders to be honest with them and to honor their commitment to lend. Stories are legion of people at checkout counters across the land attempting to use a credit card that they thought had plenty of available credit only to find there is none after a quick and unannounced decrease in credit line. I am not talking about accounts that are delinquent in payment - I am talking about accounts that are current, have always been current and in many cases actually have no balance owed at all.

Lenders say "it's a business decision" and they are correct. But that goes both ways, and this is where I am sure the collectors will argue with me. How many of us have heard collectors cajole us towards repayment based not on the "business decision to repay" but on the "moral" argument - you have a moral commitment to repay. It's as if one side of the transaction is an amoral "business decision" when made by a lender and the other is a "moral imperative" when made by a consumer. "Yes, we raised your interest rate to 30% and cut your credit limit to $5 above your balance with no advance notice, tripled your required payment amount and changed the due date unannounced and there is nothing you can do about it even though you have been a customer of ours for thirty years and have never made a late payment, but your payment is now five minutes late. Here's your late charge and we dinged your credit."

OK, so it may not actually be THAT draconian, but many people feel it's pretty close to that, and many are angry. How angry? I see a storm coming that the lenders are powerless to stop and may end up hurting them big-time.

If credit is reduced to simply an amoral "business decision" what happens when BOTH sides of the transaction see it that way? The moral imperative to be honest goes out the window and only what is expedient and can be "gotten away with" will happen. Let's discuss someone I know and we will call her Jenny. I personally know about dozen people who fit Jenny's profile and the number is growing daily.

Jenny is in her late 50's. She has a six-figure credit limit spread among a half a dozen credit cards. Her utilization is about 20% and makes her payments consistently above the minimum and on time. Her FICO's are all in the mid 700's. She has a six-figure household income, owns her home and has three paid for cars. Her children are all grown and she is preparing for her retirement. She has two pensions fully vested and a solid investment portfolio.

She has also had $75,000 in credit lines reduced in the past year and has had four credit cards closed unannounced. She feels she plays by one set of rules and the lenders play by another. She is right - she plays by the "moral imperative" set of rules and the the lenders are playing by the "business decision" set.

That is about to end.

Her plan: To retire at age 62 - as soon as she can collect her pensions and Social Security and move to the Philippines. She will sell her paid for home to her child before doing anything. By that time her investment portfolio will be in the low six-figure range, and her combined pensions and Social Security will allow her to live like royalty in the Philippines. Did I mention that she plans to hit all her credit cards up to the maximum before she leaves, and not pay them back? She won't need them in the Philippines, she will have enough cash for whatever her heart desires. She doesn't care what happens to her credit rating in the US, she will be in the Philippines. Or Brazil. Or Singapore. Or Korea. Or Mexico, Belize, Costa Rica or anywhere else in the world, even Nova Scotia. "It's not personal, it's business."

Collectors will skip trace her, maybe they will find her, maybe they won't. If they do, what can they do? Her pensions and Social Security will be Direct Deposited to a bank in the Philippines. Her assets will be in Treasury Bills. The Treasury will mail her a check every six months for the interest. None of which can be touched by bill collectors. Is he alone in making these plans? No, I know of a dozen like her and several who have already done this. The numbers will grow and with each one the lenders will get hit hard. In Jenny's case for $100,000. The new morality is "it's just business."

Lenders - you created this environment. I hope you enjoy it.

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Visit the Credit Terrorist Training Camp - http://www.debtorboards.com

A telephone in the hands of a collector is like a crowbar - it can be used to pry a mouth open wide enough to insert a foot.

Edited: 11/04/2009 at 06:35 AM by Dr Tax

That is an interesting story Tax. I honestly can't say I see any way to stop someone like that, and I have no doubt it is an appealing fantasy to many different types of consumers out there.

I hope, for the sake of all of us, that there are not very many Jennies with the kajones to actually pull something like that off.

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The FDCPA Litigant Alert
Until 12/31/2009, we are scrubbing collection agency databases 100% FREE! - Details at webrecon.com/free

My point is that when credit becomes "just business" an important part of business is asset protection. One does not have to leave the US to make oneself Judgment Proof. A simple irrevocable trust will do that.

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Visit the Credit Terrorist Training Camp - http://www.debtorboards.com

A telephone in the hands of a collector is like a crowbar - it can be used to pry a mouth open wide enough to insert a foot.

Won't Jenny's children be proud of her? Moms' best impersonation of Butch Cassidy and the Sundance Kid...only to the Phillipines instead of Bolivia.

It could happen, although it's highly unlikely. A consumer like Jenny, would not likely carry out such a plan to steal and defraud. She must have worked hard to amass the assets mentioned, and from your description, I don't envision a thief.

Your rainbow begins with the disappointment in the lack of loyalty shown by the banks, but somehow ends with the proverbial pot of gold at the end from taking advantage of the disloyal creditors.

This is not a business decision at all. It's merely a scheme to get something for nothing...a repetitive theme amongst the minions.

Seriously dude, pass the peyote and we'll all have some delusions.

Trouble - that is just the attitude I am pointing out - the inability to see it as simply a business decision by the consumer. The "rainbow" is as real as the interstate highways, loyalty from the banks is the myth.

I guess some people believe a ton of denial is better than an ounce of common sense.

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Visit the Credit Terrorist Training Camp - http://www.debtorboards.com

A telephone in the hands of a collector is like a crowbar - it can be used to pry a mouth open wide enough to insert a foot.

Edited: 11/03/2009 at 10:17 AM by Dr Tax

Albeit I'm sure you'll disagree, and this is sure to cause some cackling and laughter, "business decisions" aren't usually rooted in criminal soil (i.e. your environment and attitude of entitlement), or infected with the willful intent to defraud.

Unlike you, I rely on my experience when I tell you that "Jenny" is hardly a new incarnation of debtor evil. She's been around [the block] a few times already. She will always be in the minority, less than .1% of all debtors, and I'm surely not alone when I say I welcome all such fraudsters to take their stolen goods and leave the country.

Your Manifesto is not so impressive.

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I'll be back!

That should be my line. You prove my point well.

Your going to hate my response Tax, but the two issues are separate.

Two wrongs will never make a right.


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"We don't have a lot of money so we're going to have to think" Lord Rutherford 1871-1937 Atomic Physicist

OBJ and Trouble - I am not looking for any justification of Jenny's plans and I certainly know I won't find it here if I were. I am simply reporting what I see and hear and let you make your own conclusions. Judgmentalism will come by the bucket - that is a given. That is expected. That is the topic of the original post.

When it does start becoming a problem (and it will end up in YOUR collective laps, pardon the pun) just remember - you heard it from me first.

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Visit the Credit Terrorist Training Camp - http://www.debtorboards.com

A telephone in the hands of a collector is like a crowbar - it can be used to pry a mouth open wide enough to insert a foot.

Well, the banks can now get government funding when they can't pay their bills, so there's no need for the pesky 'consumer' or that annoying thing called 'customer service' any longer.

Does anyone see the irony in the fact that CA's work for lenders collecting money owed to the lender from people who can't pay their bills, yet the lender can't pay their own bills. Fortunately for them, they can just ask Uncle Sam for a few billion of my tax dollars to help them out.

"Dear Congress,

While we have bilked hundreds of billions of dollars out of consumers over the last few decades with our investment scams, predatory lending, late fees, interest rate hikes, and market manipulation, we've come up a little short. Can you give us some of those tax dollars paid in by those same consumers? We'd really appreciate it.

Sincerely,
Big Lending"

Guess I'm short on sympathy for them.

Here's my take on it............ (and yes I've changed my attitude ALOT lately towards collectors) ........

It's quite alright for you all to use the line..... "Don't take it personally it's just business..... but when the tables are turned it all of a sudden becomes a moral issue and the debtor is going to hell for being a horrible role model.......

I tell ya what........ as a mom ...... I teach my children on a DAILY basis to stick up for their rights.... there's a HUGE difference between de-frauding someone and allowing them to walk all over you.........




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Father.. Forgive .... Me... http://www.youtube.com/watch?v=N6784iq86G0

:0)

Flep - you summarized Jenny's attitude perfectly - when the bank screws me it's business, when I screw the bank it's a sin.

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Visit the Credit Terrorist Training Camp - http://www.debtorboards.com

A telephone in the hands of a collector is like a crowbar - it can be used to pry a mouth open wide enough to insert a foot.

Then I guess I should say Father forgive me ............

Because I just simply will not put up with anymore BS......



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Father.. Forgive .... Me... http://www.youtube.com/watch?v=N6784iq86G0

:0)

Good start...

ok Flep, say it again, this time with more heart. And while kneeling, but looking up.



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The FDCPA Litigant Alert
Until 12/31/2009, we are scrubbing collection agency databases 100% FREE! - Details at webrecon.com/free

Lending money is a business decision.

Stealing money is a crime.

No matter how much you want to say it a "business decision" its not. Taking something and not paying for it is stealing, no matter where you live.


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"No dice, Chicago. I'm giving the orders and we're coming in. I guess the foot's on the other hand now, isn't it?"

Tax,

The scenerio you described is called "busting out". It is a form of credit card fraud. Having worked in the fraud department of a major credit card company, I can tell you that this will merely result in more cautious lending in which consumers card's are blocked for unusual activity and credit limits decreased even further.

If the bank is a prosecuting bank, if the person ever returns to the country, they will be a fugitive for committing bank fraud.

There is a difference between stealing and making business decisions.

It appears debtorboards is now encouraging breaking the law rather than just promoting legal extortion.

Norton's right.

BoA took billions in tarp money and hasn't repaid it.

Citigroup took billions in tarp money and hasn't repaid it.

JPMorgan-Chase (or however they word it) took billions in tarp money and hasn't repaid it.

Lehman Brothers took billions in tarp money and hasn't repaid it, and went bankrupt instead.

Sterling Savings (a small local bank) took Millions in tarp money and hasn't repaid it, and it looks like it will be going bankrupt.

Mother&*$^#%% criminals.

EB Joe, you make a good point.

Who else here is in favor of doing away with bankruptcy protection? After all, it seems, according to EB Joe anyway, that criminals are getting the most benefit.

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The FDCPA Litigant Alert
Until 12/31/2009, we are scrubbing collection agency databases 100% FREE! - Details at webrecon.com/free

Edited: 11/05/2009 at 03:38 PM by The New Guy

Holy Mother of all threads!!!!!!!!!!!!!!!!!!

1. TNG Said............

Livin......... Livin is the best revenge you can play............. Blood runs cold.........

2. Norton said..........


I agree...... I'd like my bail out funds back please............

3. phonebook === No quotes just a response..... BELIEVE ME ..... BANKS are guilty of FRAUD and I have a perfect example that one day I will hopefully be able to share with you all..........



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Father.. Forgive .... Me... http://www.youtube.com/watch?v=N6784iq86G0

:0)