A friend of mine got into deep trouble with his credit cards last year…$100,000 worth of trouble on 2 credit cards (my friends, this is not at typo). He was pursued by American Express for $50,000 and another company. I settled these cases for about $5,000 each (again…this is not a typo). Here is the problem.
I sent a demand to American Express to provide me copies of his credit card statements. Looking over his statements for the past several years, it was painfully clear that he was living on this card. He took large cash withdrawals to pay his mortgage, car note and other general living expenses. He had absolutely no ability to repay this debt. Even if you never met this guy and knew nothing of his situation, you could look at these statements and see that these balances were simply climbing higher and higher. So what’s my problem? I’ll tell you.
1. If it was obvious to me (and things are rarely obvious to me) that this guy had no ability to repay the draws on this credit, it had to be clear as day to the folks at AE. So why did they lure this poor schmuck into a financial corner? Why didn’t they simply cut him off at the point when his interest payments were over $1,000 per month? Did they take advantage of a necessitous borrower or a mentally sick man? In either case, it made me think of how many people are out there that are in this same position but are being bled to death by these credit card lenders. Even as a debt collector, this nauseates me; almost to the point of offering my services free to credit card customers that have been taken advantage of in this fashion…almost…almost….
2. When a credit card customer charges $100,000 to his card and walks away from $90,000 of the debt thanks to great counsel (please forgive that shameless self serving commercial plug), who do you think foots the bill for that difference? You and I do. In the collection business, we have a saying; there is no such thing as an unpaid bill. Again, more injustice.
I tried to find a cause of action to pursue these credit granting vampires who clearly feast at the necks of the weak and poor. However, these monsters of darkness have a very strong lobby and, as far as I can tell, there has not been any successful cause of action against these parasites. Don’t get me wrong. I have credit and am very thankful for it. I just don’t like lenders that target needy borrowers, put them in a hole and slowly bleed them to death.
Does anyone else feel this way? If you think about, doesn’t anger you?
I am not a particular eloquent writer, but Professor Elizabeth Warren is. I would recommend that anyone interested in this article follow her blog “Credit Slips.”