Last week, a Senate committee summoned top executives from Bank of America, Chase, and Citigroup to review unfair credit practices that can punish people who need the most help.
Wesley Wannemacher of Lima, OH, testified on how his $3,200 of credit card debt grew to $10,700, due to late fees and a 30% interest rate. Wannemacher incurred the original credit card debt in 2001, mostly to pay for his wedding. After making $6,300 in payments since 2001, he still had a remaining balance of $4,400, thanks to $4,900 in interest, $1,100 in late fees, and $1,500 in over-limit fees.
Chase decided to forgive the remaining $4,400 of Wannemacher’s debt, and even offered him an apology. “We simply blew it”, testified Richard J. Strednicki, Chief Executive of Chase’s card services division. Chase also agreed to stop charging over-limit fees at 90 days.
This is great news for Mr. Wannemacher, but what about the rest of Chase’s customers who have also been subject to similar interest rates and fees? Now Chase has admitted that it “blew it” and waived the remaining debt, I would hope that Chase would be willing to waive the debts of the thousands of their customers with similar stories, especially those with excessive over-limit fees.
Chase opened the door for others to contact them to discuss debts incurred through unfair practices, “We look at any situation in which we have made a mistake,” said Paul Hartwick, a spokesman for Chase. “We think that we are pretty fair and responsible in the way we deal with our customers.” If you have a debt with Chase, I encourage you to call them and request for any excessive fees to be waived. Unfortunately, without the high profile of Mr. Wannemacher’s case, I fear that your results might not be as good.
Mr. Wannemacher’s story is very similar to many bankruptcy clients that I have consulted. It seems like the credit card companies money making strategy revolves around pushing consumers into more debt than they can handle, then hitting them with every sort of late and penalty fee they can imagine. Finding the disposable income to climb out of debt can be very difficult, but is often impossible when the interest and fees are so high. At some point, consumers are left with few choices, and filing bankruptcy can be the best alternative.
It’s time for the Government to step in and take some responsibility for stopping the unscrupulous tactics of the credit industry. Relying on the credit card executives to change their own policies will result in nothing more than superficial changes, and a token forgiveness of $4,400 is just a drop in the ocean that isn’t going to help the rest of Chase’s customers who are also victims of unfair credit practices.