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And the Phony Outrage Is…

Submitted by on March 25, 2009 – 4:33 pm 5 Comments
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The FTC receives more complaints about the debt collection industry than any other (500,000 complaints in 5 years) but has only acted on 10% of them.

The FTC has only acted on EIGHT of the complaints it’s received about debt collection. That’s .0016%!  This is why we need a dedicated consumer protection agency.

Worst of all, the hundreds of thousands of complaints the FTC gets only represent a tiny fraction of the abuse that goes on.  Debt collectors clearly aren’t afraid to break the law and intimidate borrowers into making payments using all kinds of dirty tricks.  Abuse is their business and they’re all too good at it.  Read more about debt collection here, and see this PDF from National Consume Law Center for the FTC stats.

True Outrages:

Bank of America broke into a homeowners’ house and stole her parrot after she missed one mortgage payment.

Crazy, but true.  Angela Iannelli of Pittsburgh, PA lost her parrot when a BofA contractor “mistakenly” broke into her home.  She later recovered the parrot, but is suing BofA for being grotesquely stupid.  Read more about it from the Wall Street Journal.

3. The banks are using our bailout dollars to lobby against reform – they’ve spent $500 million, or $1.4 million a day, since the beginning of last year.

Talk about back-stabbing.  But it’s the truth.  See the Center for Responsive Politics for stats on lobbying and campaign contributions.

Banks change the order of transactions in your checking account to trigger overdraft loans.

It’s true, and hugely profitable for banks.  Overdraft loans drain $23.7 billion from accounts every year, and you can lose hundreds of dollars in a single day to these obnoxious loans.  One of the tricks banks use to set up the overdraft trap is rearranging your transactions, making you more likely to overdraft multiple times per day.  Read more about “hi to low transaction ordering” and overdraft loans in general here.

There are more payday loan stores in the US than McDonald’s restaurants.

Actually, there are more Payday Lending stores than McDonald’s and Starbucks combined.  Our nation is home to over 23,000 payday lending outlets, but “only” 12,401 McDonald’s and about 8,500 Starbucks.  See this PDF for the proof.

In case you’re wondering:  Payday loans are nasty short-term loans where interest rates reach 780%, according to the industry’s own website.  Payday lending is so nasty, it’s illegal to issue a payday loan to a member of the military.  Click here for more info how payday loans they work and who receives them.  And tell Congress to create a agency to outlaw payday lending for everyone.

Take Action!

Prevent another bailout, protect consumers, and end the “too big to fail” era.  Tell Congress to enact real financial reform.

Submit YOUR Outrage!

What do you think is the most outrageous thing the banks have done?  Submit your idea below in the comments section.  If we use it in a future quiz, you could win a prize!

5 Comments »

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  • Marcia Foster says:

    Kleptocracy is a term meaning “rule by thieves”. It is not a real form of government; it’s a pejorative term for a government whose officials and ruling class accrue wealth and power by misappropriating public funds at the expense of the wider population. I was searching for a term that would define a government ruled by big business when I happened on this one which was – sadly enough – close to what we’re coming to.We need to do two things fast – or we will become a kleptocracy: 1. Separate Congress from K Street, 2. Separate Investment banking from commercial banking. I don’t think the current bill has that in it, but it is at the heart of the problem of “too big to fail”.

  • David Greene says:

    I use credit unions only.

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