Over 65,000 complaints prompt the Fed to change credit card rules

In what the media has deemed an unprecedented move, the Federal Reserve adopted new rules in mid-December to address consumer frustration over unfair credit card policies.  The new rules, which don’t go into effect until 2010, include prohibiting banks from increasing the rate on a pre-existing credit card balance and providing consumers a reasonable amount of time to make payments.

In my opinion, it is too little too late.  While this is a step in the right direction, much more needs to be done, especially to fight unjust data mining and predictive analytics on behalf of rapacious credit card companies.

Read the Federal Reserve’s official press release.  

Comments

[mncvmn]

Congressman Gary Ackerman's good friends, the Zises Brothers, will sue near 200,000 Americans this year for credit card default using the trade name "Unifund" registered with the Ohio Secretary of State (The trademark documents are available on-line and free.) Since the trademark "Unifund" is owned by a partnership, Credit Card Receivables Fund and ZB Limited Partnership, proceed checks to "Unifund" can be deposited into an account at the Israeli Discount Bank (IDB) for ZB Limited Partnership and/or Credit Card Receivables Fund without being declared as income for Unifund CCR Partners (...hey State of Ohio, I think you will want your cut). My guess is that it is about a 90% skim for the past 25 years.
The Zises Brothers doing this skim are the same Zises Brothers of Integrated Resources; a tax shelter scam that went bust some time ago. They are experts is avoiding income tax, and this scam is no different. In most states, Unifund is not registered with the Secretary of State as a tax paying business enterprise. That is because State code specifically excludes the filing of a collection lawsuit from the definition of “doing business". The legal theory goes along the lines that collection lawsuits are "loss mitigation" and not an inherently profit making enterprise. The IRS has similar rules that the Zises Brothers entities abuse to avoid declaring income.
The Zises Brothers have applied this tax avoiding principle to a business they have where the principle activity is to sue for profit...HUGE profits. Unifund has a contract with Asta Funding dba Palisades Collections to sue people on behalf of Asta Funding for a percentage of the judgment. This contract is for the purchase of bad credit card debit from Citibank and is funded, in part, by the Israeli Discount Bank for nearly $900M. Copies of the contracts can be purchased on-line. Much of it is available in publicly traded Asta Funding quarterly statements. One of them specifically rewards Unifund with a 50% premium for collecting "outside the Statute of Limitations". Hey FBI, sounds like a violation of the RICO Act to me.
Now, where does the money go after it gets to ZB Limited Partnership. Well, ZB Limited Partnership at 767 3rd ave NY, NY is registered with the Ohio Secretary of State as a Foreign Corporation (doc available on-line and free) out of Delaware. You can search the Delaware Secretary of State database for legal entities, and you will find scores of filings by the Zises Brothers, including ZB Limited Partnership and Credit Card Receivables Fund, Inc. You will have to pay a fee for a copy of the document. Anyway, ZB Limited Partnership is owned by ZB/CCR Corp. (another account at the IDB). By the way, 31% of the Israeli Discount Bank is owned by the Israeli Government, and has been fined $12M for failing to implement anti-money laundering regulations.
The ZB/CCR Corp filing with the Delaware secretary of State has an interesting mailing address "C/O Forest Hill Capital, 800 Second Ave., New York, NY 10017". Forest Hill Capital is the old name for Family Management Corp (FMC), another IDB account; the same Zises Brothers company that manages the Congressman's money. So, now we know where the Unifund skim goes. But, this is where the trail gets very interesting.
Numerous business databases, including Manta, have a company known as Associated Capital, L.P. or A Capital or ACAP at 767 3rd Avenue 16th Floor, NY, NY. That is the same address as ZB Limited Partnership in the Ohio trademark filing (first one). Associated Capital was the single biggest contributor to funds supporting activity against the recently enacted finical and banking reforms. Gary, what sweetheart amendments did you get to save Associated Capital for the Zises Brothers?
It is a sure bet that the single biggest FMC investment is with Associated Capital. Does Associated Capital actually make any money? Or is it principal function to loose money, lots of money, for its clients (such as ZB/CCR Corp.)? If they loose so much, where does it all go? Let me shed a little light on the answer to this question:
"This Schedule 13G is being filed jointly by Associated Capital, L.P., a Delaware limited
partnership (”Associated”), its general partner, A Cap, Inc., a New York Corporation (”A Cap”), Jay H. Zises, the President and a director of A Cap, Selig A. Zises, Vice President, Treasurer and a director of A Cap, Nancy J. Frankel-Zises, a director, Vice President and Secretary and the sole stockholder of A Cap, and Associated Capital Offshore, L.P., a Cayman Islands limited partnership (”Associated Offshore”). Associated, A Cap, Jay H. Zises, Selig A. Zises, Nancy J. Frankel-Zises and Associated Offshore are hereinafter sometime referred to collectively as the
“Reporting Persons”. The business address of Associated Offshore is c/o Goldman Sachs(Cayman) Trust, Limited, P.O. Box 896, George Town, Grand Cayman, Cayman Islands, British West Indies. The business address of each other Reporting Person is 477 Madison Avenue, 14th Floor, New York, New York, 10022. Jay H. Zises, Selig A. Zises and Nancy J. Frankel-Zises are each United States citizens."
I find it very interesting that the Israeli Discount Bank on 5th avenue in New Youk has semi-autonomous branches in Zurich Switzerland, Uruguay, Brazil, Chile and the Cayman Islands. Congressman Gary Ackerman, did you "loose" any money with FMC?

[LegalBeagle]

Can anyone explain why the banks and credit card companies are entitled to immediate financial relief using the taxpayers money, but the taxpayers have to wait until 2010 to be protected from the fraudulent practices of those same banks and credit card companies?

Isn't this America, the country that started a revolution over a tax on tea? We all need to wake up and start demanding immediate financial relief for the PEOPLE of this country.

Here are my suggestions:
1. File an immediate complaint with the Federal Trade Commission against your credit card company at https://www.FTCComplaintAssistant.gov/. The FTC will only take action against a company if it receives thousands of complaints, so we all need to speak up.

2. Email Speaker of the House Nancy Pelosi with your complaint at:
AmericanVoices@mail.house.gov or go to http://www.speaker.gov/contact

3. Contact your Representative to demand further investigation of the credit card companies at https://writerep.house.gov/writerep/welcome.shtml

4. File a complaint with your State Attorney General. To look up your state go to http://www.naag.org/attorneys_general.php

5. Take the time to thank Rep. Maxine Waters for having the courage to stand up to the credit card companies at http://www.house.gov/waters/IMA/issue.htm

Many thanks to Kevin Johnson for this website.

[Miami Mike]

How about this . . .

"The Month of May is No Plastic Month!"

We consumers can probably survive a month without charging ANYTHING at all - the credit card companies are exactly like sharks, they have to eat to live, all the time. If they stop eating, they die.

One full month without ANY new charges won't kill us, but let me tell you, it will sure get their attention - and scare the living **** out of them as well.

Spread it around, use the power of the internet to send a powerful message to our credit card overlords - we're tired of being screwed over, and we ARE fighting back. Hit 'em where it hurts - in their already hurting bottom line.

"The Month of May is No Plastic Month!"

Spread the word . . .

[Edward Weinberg]

What does the latest bailout revision do to curtail credit card company abuses sooner rather than later?

[mgg]

AMEX sucks, period. Their reason for lowering my credit was"TOO MANY INQUIRIES" what does that have to do with my CREDIT LINE! I pay my bills on time, have a high credit score and I get this. Please, can someone explain this to me, when I called AMEX that's all they could tell me "TOO MANY INQUIRIES".
I have 1 bank (1 loan), 2 credit unions (2 loans) & 2 credit cards with almost a zero balance w/no late payments.
I am cancelling AMEX and VISA business.
AMEX will be the next to go "OUT OF BUSINESS".

[Denver Bob]

Bring back the Usary laws....

Back in 1980 - when the interest rate was 13+% Banks and stores complained that they were loosing money because people could "buy today and payoff later" at only 6%.

Congress removed the laws and then the rate shot to 23%. 6% never to be seen again (except in "special offers".

License to steal = Interest rate.

[Carole]

This is definitely too little, too late. I've written to my two senators, and my representative about this. The banks are doing as they damn well please now. They need to be told to roll back these interest rates. And on our side, we need to stop using these cards. I've already decided that I am only keeping one, and once I get my other two paid off, I'll be looking for one card with a low interest rate.

[Robert in New York]

One day my card stopped working.

Amex told me that I needed to make a $5000.00 payment, almost 8 days before the normal due date, before I could use the card again because I had hit a balance that they were not comfortable with.

WHERE DID THIS COME FROM and WHERE WAS THE NOTICE?

That's what has me really upset with them. Yes, it turns out that they did send me an email and left me a voice mail on THE DAY that they changed my spending limit, but the way I found out was in gas station trying to use the card.

That is just the poorest example of customer service I've ever experienced.

I understand that they are free to set my credit limit as they see fit, but my experience would have been so much better if they'd given me a few days heads up. I felt like they yanked the rug out from under me because they gave me no notice.

I've all but STOPPED using the card, but I don't think they really care. I've been a card member since 1983 and their actions mark the end of a long relationship. If you can, STOP USING YOUR CARD TOO. Let's send a message. Thank you.

[Holly Norton]

Kevin,

I thank you for hosting this site, it is needed.

I too an a "victim" of AMEX. I always paid my bill on time and if not in full a substantial amount.

After making a $6,000 payment I was blind-sighted while trying to use my card. The card declined? I called AMEX to ask why, and was informed over the phone that they reduced my Credit Line by the amount I paid....$6,000.00.

When you look at my credit report, it says my "HIGH CREDIT" is $6,000 more than my balance.

Why isn't something being done about the negative impact to the consumer's credit score? I'm all about it if you don't pay, slow pay, in collections...but when that's not the case....WHY because of AMEX financial trouble in the public suffering????

[Mike C.]

Hope Joe Biden realizes the housing and jobs problems of the "middle class" are interconnected with the credit card disgrace in this country. Isn't it interesting how some of the worst of these companies call Delaware home?

[Jim]

I have had a Chase Visa card for 19 years which I generally use for balance transfers and have always paid off in a timely manner. I have never been late on a payment and always pay well over the minimum amount. Chase has raised the monthly minimum payment from 2% to 5% and added a $10 monthly service charge on my account. I had been paying 4.99% till the balance was paid off. My Fico scores are all in the mid-750's. When I called to complain I was told these increases were recently given to 500,000 of their cardholders and the only recourse I had was to pay off the card or accept a 7.75% interest rate for 9 months then pay the prevailing rate.

[JK4507 - Marina del Rey, CA]

Credit education should be requisite in HS and college too. And credit guidance should be publically broadcasted like AIDS and anti-smoking commercials are.

[Teresa S]

I have decided to pay my cards off after thinking I had worked out them reinstating my credit line (Chase) and then getting notification that they took my rate from a fixed 7.99 to a variable tied to prime. I am paying $10 a day on my cards . Want to see how long before they contact me about it.

[lynm]

I agree completely w/Velma. A lot of points are dead on. Get educated, take ownership of your money, b/c if you don't others' will. Learn the Rule of 72.
If we don't like what the CC companies are doing, follow that 'stick of gum' example (my personal favorite) to keep your credit 'alive' & just use cash or money orders to make purchases. Keep the plastic purchases down to a bare minimum. Companies are downsizing their employees, let's follow suit and 'downsize' using the plastic.
I also like the boycotting of plastic for 2 weeks, though I say let's shoot for 3 weeks just to really p**s 'em off. Similar to Velma's statement, when you look to the Gov't to 'save' you, care for you & be the end all, be all Saviour in your life, you start to lose the right to be the Master of your own money, your own life. Not cool.

[Bill Cash]

I just stopped by your blog and thought I would say hello. I like your site design. Looking forward to reading more down the road.

[Sheryl Gerstl]

In America today we need an act of Congress to stop all of the problems we have with invasion of privacy. A persons' credit score should not be available to employers who want to pry or to car insurance companies. My car insurance rates should not be based on my credit score.

What is happening in America needs a committed group of consumers to push permanent changes in our laws.

[Dan]

Unfortunately, these are tough times; not as tough as our parents and grandparents have had though. We all have come to the satisfaction of living in luxury and thinking nothing bad can come to me or my family. Reality has set in for most, if not all of us. It is unfortunate that the credit cards have become sort of like the Cigarette manufacturers, where they put out a product, get us hooked (I do not smoke myself), we realize the demise of our addiction to the plastic, then they hike interest rates to keep us on the addiction; all the while they put out ads and marketing tools to "help people get out of debt". Really?? I mean really?

I'm 28, I have multiple cards. One, who will go un-named, but rhymes with Capital Won, had me on a 30% rate. I called them and told them that I was never using there card again, paid the balance off over the phone and didn't use the card for @ a year and a half. Then, I spose they wanted me on the addiction and sent me a 0% offer for 18 months! I took that up since I have to use the card every so often to keep it on my credit right, so they also dropped my rate to purchases of 9.9% and I continue to use another card for my daily purchases and have my rental house balance tranfer on that card at 0%.

I guess the point that I am trying to make is that if you need to, get vicious. Apply for another credit card and put the highest rate card away for a while, buy a pack of gum on it to keep the credit turning on it. They will get the hint after a while. If you can't get another card, then maybe (and in times of recession it may be hard) you shouldn't have led youselves down a path of spending and mortgaging your house to the hilt. Did people really think that condos in Florida would keep appreciating at 20% a year forever?? This comes at a time where most American's need a crises to make them pay attention. What's next?? A health crisis to make people eat less?

I have much sympothy for people living paycheck to paycheck and supporting a family, but not so much for those who fail to educate themselves financially. Aren't we all using the Internet for something besides looking at porn? Read a financial book, quit listening to your neighbor who has a beat up car, a hot motorcycle, a quad in the garage, and a crap ton of toys...who keeps asking you for favors.

America, this recession will not be over for a couple of years. We are turning into an economy of spenders to savers, which is about time since the average saving's rate is like 0. We are turning to the Government to lean on more and more and are becoming more and more lazy. Get off the couch, read to your kids, educate them, get a second job, turn the cable off completely, and get your ass moving. When you turn to the Government to save you, we go against all that this country was built upon, and more toward the failing European ways. Sure, they may have universal health care in Europe, but they can't invest worth a crap and relish in Capitalism like we can...or did.

[Velma]

2010 is too late. Credit card companies are raising interest for any reason they want too. So in 2010 do you think they would decrease interest some. I don't think so. How is the person paying bills on time going to get out of debt when credit card companies raise the interest just because they want too.

[Kathie]

I had my credit card with Citibank for 11.50% for several years. Then all of a sudden they raised it to 28.5%. I was never late the entire time. I called and they told me that there was a 200.00 outstanding balance with Radio Shack. I told them that was for a phone I had took back and they did not get it off. I told them I could not paid the interest rate they raise me too. I continued to pay my payments as before but they sent them back with more fees added. That was in 2003. THENNNN, all of a sudden in 2007 I get a deputy at my door that a company called Unifund CCR as sueing me for 46,000. I about passed out. My balance in 2003 for 4,000+. To this day they have threatening to take my house, cars, etc. I have since been in the hospital because stress related incidents plus a stoke. I will sue them if I can get well. So beware of credit cards.

[Brenda]

you might want to check your posting time. I posted this at 11:00 a.m. EST and it reads 07.54AM which is a 3 hour delay. Thank you.