While I was watching C-Span and CNN this afternoon covering the AIG bailout thievery, Edward Liddy, the appointed CEO of AIG said that he would not release the names of the receivers of bonuses totaling around $167 million. Liddy read some mail that suggested that those Executives who received the bonuses should be strung up with piano wire around their neck and also all the members of their family. These letter writers wanted names and addresses of the executives and even their children’s names.
Now while all this was going on, Liddy reported that most Departments of AIG were very profitable. Also slipping by without any comment that I heard was that Britain had agreed to receive something on the order of $400 Billion of American Taxpayer funds. But possibly the most egregious statement was that when the additional bailout for AIG and others came up in February, It was discovered that someone had slipped into that big sprawling bill a short little item that stated: “that no bonus could be negated just because of the performance of AIG”.
Meanwhile, under the radar, a whole gaggle of financial firms who have received bailout money are making AIG look like honest brokers when it comes to the money stealing game. And they are getting a free run on taxpayer dollars. Let me give one example: Capitol One Bank and Credit Card Company extraordinaire.
Capitol One received $3.55 Billion in bailout money to help loosen up the credit flow. So what did they do with the money? Well the first thing they did was go buy a competitor bank. But it was the next thing that got my eye. You see, thieves care not the damage they do, if they have an opportunity to steal especially when they think they can get away with it, they go for it.
Anyway here is what they have done. They have sent out notices to most all of their approximately 50 million cardholders, saying they are sad to inform us that they have to raise the interest rate on their cards. Excuse me, that’s your and my card. The rate of increase is on the order double to quadruple what is the current rate on the cards. This after receiving the $3.55 Billion from you and me, something we didn’t vote to give, and something we had no voice in.
To add insult to injury, just take a look at this scenario:
If the average cardholder owes $1000 on their card and were paying 6.0% like me, and the new rate is say 15%, something that is about middle range of their increases, then Capitol One can expect an increase in income of 9% per year on that $1000. Fifty million cardholders would owe $50 Billion. At the $1000 scenario that would give Capitol One an additional $375, 000,000 of income – every month. I’ve heard of vultures circling waiting for prey to die. But at least the vultures wait for the demise. Capitol One decided to get you while you were still breathing. Just think of the American families that, on the edge, will go under because of this. The United States of Corporate America are aggressively dragging us into financial slavery. And our good Government is helping them.
Those in a rage at AIG could suddenly go postal when the Financial community begins to really gang up on them. They won’t be satisfied with anything less than blood. Obama can stop this tomorrow. He can put a freeze on Interest and impose a Usury limit in America. Otherwise, I fear there will be blood.
15 comments ↓
Clear this up for me – are these credit card companies just changing the rates even though it was contracted to be at a lower rate? Or, are people just complaining because they don’t like what they agreed to after the fact?
There’s a big difference in how I views this based on the answer to that question.
I, as a Capital One Cardholder, can tell you for certainty, that my card agreement had this guarantee when I took it out last year.
I am copying verbatim from the agreement:
“You’re important to us. That’s why you’re getting this offer for a low fixed 6.99% APR that actually drops to an even lower FIXED 4.99% APR after 12 months. The best part is, neither rate will increase for the life of your check or transferred balances.”
That is the exact wording.
Spooner, I read this thing word for word several times and I can’t find anything that authorizes Capital One to raise my interest rate. And obviously I won’t get that 4.99% rate.
I received an “Important notice of a change in terms” and I’m sure so did the other 50 million card holders. On page one of the brochure is this entry in bold and underlined:
“You have the right to decline these changes – for information on how to do this, please see page 4.”
Here verbatim from page 4:
To decline this change, call our automated system at 1-800-231-0789 by 8 p. m. ET , April 17, 2009.
Also on page 4 is the following:
“If you decline, we will close your account on May 17, 2009.
After that date you will not be able to use your card.”
and finally. “If you decline, you will be able to pay down your balance at your existing terms.”
All seems legit so far – right? Well to find out what can and does go wrong please go to this link I am sending you. It contains a multitude of what is really going on with Capital and for that matter you can move around in Consumer Affairs and look at all of them. There’s enough reading to keep you busy for the next week if you really want to get deep into it.
http://www.consumeraffairs.com/credit_cards/capital_one.htm
I also filed a complaint with the Office of the Comptroller of the Currency and is their policy they always send a copy to the Firm. Capital One sent me a letter acknowledging that they received a copy of the complaint and gave me a number to call to discuss the complaint. Naturally that person is never available and the calls are not returned. This is typical of Capital one behavior.
Spooner, the bottom line is that they are a shyster outfit as is indicated by the thousands of complaints received at the link I gave. And when I see their commercial “What’s in your wallet?” I have an answer – they are , and they want to leave it empty. Unfortunately they are just typical of the Credit Card Industry.
Spooner
I spent considerable time composing a reply to you and I included a link to Consumer Affairs and the Capital One Complaint section. I clicked submit and nothing is posted. so maybe I can’t denigrate a Business Concern with specifics on this site.
But On the Consumer Affairs site you can also look at the complaints that have been filed for a multitude of Card Companies.
Please go google Consumer Affairs Capital One and you will get a starting page. I think you will see that my experience is not unique and that there is something seriously wrong with the workings of these Financial Institutions.
The American public needs protection from these predatory outfits. Two protections I suggest is 1) A National Usury Law and 2) A Truth in Financial Oversight group.
I’ll see if this one will post.
And spooner, for me personally, the interest on my charged amount was guaranteed not to be changed during the life of the account. Actually the interest was supposed to drop to 4.99% from 6.99% on May 17 this year. The amount borrowed at the payment schedule would be for approximately four years if I paid my payments on time and if I didn’t charge any more. In less than one year I have repaid 85% of the amount never having been late on any payment and paying way in excess of the minimum as the 85% would indicate. I can pay the balance tomorrow if I choose, but there are many out there who can’t.
I suppose that is my point.
Correct me if I’m wrong but one doesn’t pay interest on a credit card if one clears the account every month? With other words, interest is only charged on outstanding balances, surely? So if you pay your credit card off every month you don’t pay any interest?
Well, I think this issue is a simple enforcement issue, and nothing more.
If you have a contract that specifies that the interest would remain at one rate and no more – no matter what – then any change of that is a violation of contract, and not an issue of usury laws or anything else.
Contracts must be enforced.
If, on the other hand, there’s something in the contract that allows rate changes – then it’s just a matter of not doing business with those companies, not trying to get the government to violate the contract when it goes a way we don’t want it to.
And, Anja makes a good point – obviously there’s no interest when it’s paid off. Too many people have gotten into the habit of charging everything, from a tv to a cup of coffee. This kind of lifestyle cannot be maintained, and it’s time for us to take our pill….and learn some basic finance lessons in life.
You both bring up good points and yes most cards are “no-Interest” if paid within 30 day I suppose. But I use a debit card for things like that. When I use a Credit Card for cash the amount is not what would be a normal amount. And I use the card instead of other funds because for example, if I pull from an IRA, the cost might be more ( in tax ) than borrowing money at 6.99% and paying it off in less than a year.
If you didn’t google as I asked , then it could be construed as my mad against them. If you will google – credit consumer capital one – , I suggest opening the third listed link, there you will find a very large data base of letters from customers. There are all kinds with Capital One and if you will spend a little time reading the letters (just pick some at random, might take a coupe of weeks to read them all ), you will find the reason for my rant at Capital One.
I am trying to get a Class Action going against them, but not having much luck, Law Firms say there is too much time and expense involved to take on a Class Action against a company like Capital One and there is a low probability of winning. But using this google page as a starter you can check out just about any other firm that has been receiving complaints.
The problem affects just about ever person in America.
The important question, though is:
“Are they just violating the contract, or are they just acting on some small part of it that was agreed upon in advance?”
I’d say, like spoon, that the contract is what needs to be upheld. Obviously, if they’re just changing the rate that was agreed upon then they do so in violation. But, from what I’ve seen in my credit card agreements over the years, there’s always a section about future rate changes. I’ve never seen one that claims to be fixed forever, especially because it needs to float with prime.
The card I have was a promotion. The rate was guaranteed for the duration of the original loan of $16,000. I didn’t want to take that amount from one of my IRA’s because it was in the time frame where penalties would be assessed if I changed the IRA status.
So with a rate of 6.99% for the first year and a move to 4.99% beginning May 17, 2009, it didn’t look like a bad deal. In the few months since I opened that account, I have not used the card and have paid back $13,500 of the amount. So its not like it is a problem for me to handle, I was going to pay it off in May anyway. That is not the issue. The fact that they want to change my interest rate when the thing I have says “guaranteed rate” and after several scouring’s I can’t find anything that says anything about changing my rate ( now had I placed other charges on the Card, that would be different).
So I went to the Consumer Affairs section on Google and looked up Capital One to see if there were other complaints. There are thousands of them. And I found many exactly like mine and many worse than mine. I’ll bet some are just blowing smoke, but not all those people. I’m betting a great many are like me.
If you will just google Consumer Reports Capital One you will see what I’m talking about. By the way , last year the CEO of the Credit Card Division was the subject of illegal financial transactions like this and his statement was that Capital never raised anyone’s interest unless they had missed payments or been late a minimum of three times in a year. I knew that was BS.
That’s when I started to check them out. I found that for 2007 the single largest income producer for Capital One was penalties.
That right there should be one of the reddist of flags.
After checking them out, I have formed the opinion that they are at best sneaky and at worst fraudlent.
At that site you can navigate to just about all the other major credit card companies and check them out. They all seem to be the same. And they all believe in jumping interest rates to obscene heights. I won’t borrow money if it cost me more than 10%. But I realize that my financial condition is better than most. There are many who get financially ruined by these obscene charges. I talked to a lady who had a situation where the money she owed was 786 % of what she had bought. From a less than a thousand initial charge, she now owed $5,500 to this financial company. If there is not a law against such, there should be. That’s why I call for a National Usery Law.
With Capital One, and I assume others of that stripe, Cliff, cards are not the only rip off. Many years ago, my mortgage had been sold to Capital One. A tree came down through my roof on Thanksgiving. I contacted my insurance company and they authorized emergency repairs. The appraiser came out and said five or six thousand should take care of it. I got the check the next day or two. The check was to be sent to the mortgage holder, then would be released to me. We sent it in. We sent messages and letters which were either ignored or answered with gobble-de-gook. Meanwhile, I had to take out a personal loan to pay the contractor so he could pay his help, it being Christmas by this time.
In about February of the next year, I finally got hold of an honest lady. She told me two things. If I wanted quick action, I should have included a self addressed stamped envelope! None of my letters or e-mails counted, nor had there ever been anything to that effect communicated to me..
I asked her, “This is a small claim, just over the amount that has to be sent to the mortgage holder. You’ve held my check up for over three months. How many other people are getting the same treatment?”
She said, “Probably a million or so.”
I said, “You mean you are getting interest on five billion dollars just for hold ing us up like this?”
She said, “That’s about the size of it.”
I agree Steve. There is no shame when it comes to these financial institutions gouging the people. I have had run-ins with Insurance firms and find that sickening.
One that is a burr under my saddle is the practice of denying a claim when it is first submitted simply because the insurance company knows that some people will not follow up and challenge them. I remember a movie “The Rainmaker” , you might remember it ( with Matt Damon ). That practice happens often. And it is very difficult for an individual to overcome a large law firm.
The movie ended, if you will recall, with the victim getting nothing. That is too often the case.
a bit on aig, this from the bloomberg channel, a number of companies/individuals involved in the aig bailout plan, as an insurer, had insurance policies already covering the monetary losses that they supposedly bore with the aig default. so with both hands..money from us, money from their own separate insurers.
Ah yes, an ancient adage: “The rich get richer and the poor get poorer.”
Look at the insurance scams that went on just before 911 and who got a lot of money for losing their buildings. It jut goes on and on. They are getting so blatant that they don’t care anymore. They figure they have a lock on the country, so they don’t even have to keep their “cleverness” hidden anymore.
They don’t feel there’s anything we can do about any of it. We have no Constitution, no courts worthy of the name, and they have more firepower at their disposal than We the People can ever muster. They’re self-satisfied smile is becoming a sneer.
This has been a giant Ponzi scheme from the get-go. I actually heard on CNN today a reporter seriously advocating that the Rich get richer because it would help the country. And this lady wasn’t even blond.
Looks to me like the anger is starting to boil over a bit. Every time they take more money from us and give it to an incompetent corporate tool, more and more people come to our side. I’m a little scared of what may come, but I guess, “bring it on” is the new american phrase?
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