New tricks, same credit card companies

The Wall Street Journal, in an article published today entitled ”The New Credit-Card Tricks”,  confirms my 2009 premonition: If the Credit CARD Act is passed, credit card companies immediately will find ways to recoup their loses with new fees and tricks.

Read about some of these new fees and tricks that have consumers and advocates ruffled. 

Credit card bill won't outlaw redlining

Lights. Camera. NO ACTION!  Despite the glorious passage of the Credit CARD Act by both houses and the president’s impending signature, nothing has been done to outlaw assessing a customer’s creditworthiness based on where he or she shops.  In my opinion, the most egregious practice of some credit card companies has been overlooked. 

WSB-TV, an ABC News affiliate in Atlanta, produced a brief story yesterday that reintroduces my story and focuses on the unfortunate fact that there is still plenty work to do to make the credit card industry fair and transparent. 

While I am certainly disappointed, I am not discouraged.  We have won a great battle, but the fight is not over.

[ Watch the story. ]

Woman denied credit due to blacklisted mortgage company: Bank of America

There have been literally hundreds of stories in the media locally and nationally about the current credit crunch and how everyday consumers are coping.  Many of these stories have focused on American Express, perhaps the most ruthless of credit card companies when it comes to the reasons it denies credit to good customers. 

Yesterday evening, a story concerning American Express denying credit based on a customer’s mortgage company aired on San Diego’s ABC affiliate, Channel 10 News. The story focuses on Debbie Berger, a resident of El Cajon, California. 

Canadians equally appalled by AmEx's actions

The news continues to spread literally around the world about the preposterous actions of American Express and other rogue banks that limit access to credit based on where customers conduct business. 

The New Credit Rules Campaign was mentioned in this week’s Maclean’s Magazine, Canada’s only national weekly current affairs magazine that has a circulation of 2.8 million. As one Canadian who wrote me put it, Maclean’s is like “the Canadian equivalent of Time Magazine”. 

Based on estimates, our campaign has reached about 20 million consumers worldwide, but there is plenty work to do because nothing has been done yet to prevent such blatant discrimination from happening again. 

Did you catch the contradiction? AmEx didn't fool me.

In the New York Times article published today, American Express said it has decided to stop using what it called “spending patterns” as criteria in its credit line reductions.  Spokeswoman Susan Korchak stated, “The letters were wrong to imply we were looking at specific merchants.”  She is referring to the following statement that appeared in letters notifying customers of a credit line reduction: “Other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express.” 

The New York Times article goes on to say that American Express is, however, going to continue looking at customer’s spending patterns when it comes to mortgages.  By doing this, American Express totally contradicted what it said earlier in the article about changing its policy. 

Don’t be fooled by the semantics.  Where you shop for a mortgage is, in fact, a part of your "spending patterns" that can be compared to and compiled with other data.  Consumers may not shop for a mortgage every day, but they shop for the best deal even if they can only afford one product.  (A New York Times article published in December reported that certain groups of people are more often offered sub par products when they are numerically identical or better off than their counterparts.)  By the way, mortgage companies are “merchants” or "establishments"; they sell money.  Therefore, American Express meant to say the contrary: we will continue to use spending patterns as criteria in credit line reductions.  Also, we will only admit to targeting unstable mortgage companies, which we will not name, as bad establishments. 

Be careful.  The legerdemain continues.

Important Note: Early next week, we will post the mortgage companies of people who have received this letter along with the other places they have shopped. You make your own conclusions.

Big defeat for consumers, small victory for American Express

American Express has gotten smarter over the last two days –smart enough to know that it can make this negative attention subside by taking a few shrewd steps. Its crisis management team finally put on its thinking cap and realized the need to respond. Perhaps government officials, customers, stock holders, retailers, and top executives put pressure on the company to quash this public ridicule.  Maybe American Express saw a ripple in its card activity.

I expected the company’s response to be more cunning. The statements made in the New York Times were gawky at best and an exercise in public relations hearsay.  In brief, the company appeased upset retailers by saying there is no “blacklist” while adopting a new policy because the old one was “confusing to card members.” 

Good Morning America broadcasts my story to over four million

[ Watch the Story ]

Yesterday, ABC’s Good Morning America broadcast my story to over four million viewers. The six-minute feature literally stopped people in their tracks all across the country.  The story caused a major ripple in the blogosphere.  People everywhere were shocked to learn about the insidious practices of some credit card companies.  Everyone that I talked to was pleased with how it came out.  Undoubtedly, the surprise was Speaker of the House, Nancy Pelosi’s appearance.  I received hundreds of e-mails and this web site reached just over 30,000 page views in a few hours –an amazing feat!  Also, since the airing, hundreds of people have subscribed to our newsletter.  At this rate, we will reach our goal of educating over 50 million people about how to better manage their credit. 

What did you think of the story?    

Fear of reprisal, a common sentiment amid hundreds of e-mails

Unbeknown to me—perhaps because of my youthful naiveté—speaking out against the treacherous policy of a multi-billion dollar bank on national television is quite bold.  I didn’t think so; I thought it was simply the right thing to do, and frankly, I had no anxiety or qualms about it.  The ability of the common citizen to challenge systematic injustice is one of the many blessings of our democracy. 

Are you missing the point?

As a result of having my horrific, honeymoon-tainting, credit card story told by mass media, I often receive letters, e-mails, and blog posts from disgruntled consumers who relate their own disastrous credit card stories in painstaking detail –which is fine. But one of the most frustrating results of reading these letters and online comments is realizing that, in the majority of cases, people totally misunderstand the purpose of my story, which is not mainly the reduction of my credit limit.  Instead, the purpose of the story has everything to do with the unjust and discriminatory practices that led to a reduction of credit not only for me, but also for other consumers.

Major paper runs my story on consumer profiling?

On Saturday, December 27, 2008, I instantly became a celebrity or maybe I should say a popular pity, because no one wanted my predicament. 

At around four o’clock that afternoon, my inbox was full of e-mail messages; my cell phone was vibrating incessantly with phone calls and text messages; and my appearance in public would cause a few double takes every now and then. People were probably saying to themselves, “Is that Lupe Fiasco or the guy who had his credit line lowered because he shops at Walmart?”    

That afternoon the Atlanta Journal-Constitution, Atlanta’s largest newspaper that has a circulation of about 325,000 and about 2 million readers, distributed its Sunday edition with my stern pose on the front page.  Unbeknown to me, my story was front-page material.  

About two weeks before the paper came out, I wrote to an op-ed columnist at the paper.  After giving him kudos on his assessment of this credit crisis, I shared my personal horror story. The next thing I knew, I received an e-mail from an investigative reporter that was intrigued by my story. Apparently, she was shocked that American Express lowered my credit line based on where I shopped.  So was I, and that’s how this whole thing got started. 

Read my story at the Atlanta Journal-Constitution's web site.