Four credit card victims were ordered to sign waivers allowing their creditors to release their private financial records to the public before they could testify before the House Financial Services Committee. The consumers had flown in from across the country to share their stories at a hearing on the Credit Card Bill of Rights, but credit card companies insisted—and Republicans and Democrats agreed—that it would only be fair to release documents like credit scores and a list of recent purchases in order to rebut the consumer’s claims. “Fair is fair,” Congressman Spencer Bauchus (R-AL) barked, as he defended the absurd request. Ultimately, the consumers didn’t testify, but one invitee, Steven Autrey, released his prepared statement, which slams creditors for their abusive and predatory business practices.
Here is what Steven Autrey planned to tell the Committee:
Thursday, March 13th, 2008
Testimony of Steven AutreyLadies and Gentlemen of the subcommittee, Ranking member, and Madame chair: Good morning, and thank you for inviting us to speak before you.
I would like to give you a brief recap of some negative experiences both my wife and I have had with one particular credit card issuer. Though Chase, Citibank, and GE Money Bank have engaged in similar behavior, I would like to make you aware of the actions of Capital One with regards to our retail credit card accounts.
When a consumer applies for credit with a card issuer, or as we did – respond to a “pre- approved” offer, upon establishment of an account, a bona-fide financial contract exists between the consumer and financial institution. It is because of consumer protection laws at the federal level, that the rates, rules, and terms of the contract are spelled-out in advance of the first use of the card. Both the customer and financial institution trust that the other will live up to the terms of the agreement.
Unfortunately, an increasing number of credit card issuers are engaging in less-than- ethical practices at an alarming rate. Unilateral, or one-sided changes in the terms of the contract – most always in favor of the credit card company – are becoming routine practice at an alarming rate. These one-sided changes are bad for consumers, bad for our national retail credit health, and essentially violate the spirit and letter of Title 15 Consumer Credit Protection Law.
My relationship with Capital One goes back to 1999, when I was solicited with an offer for a Visa card with a “fixed” 9.9% rate card. I applied over the phone, and was approved. The card was used for both purchases and balance transfers in a positive relationship with Capital One for eight years until July, 2007. That’s when Capital One advised me in a billing insert that my “fixed” rate of 9.9% was being raised to 16.9%. No reason or explanation was given – I was not late on payment, and had not utilized the entire credit limit. This was a unilateral change to the terms of our agreement.
In August, of 2007, I wrote a letter to Mr. Richard D. Fairbank, Chairman, President, and CEO of Capital One, at their McLean, Virginia home office. My written statement will contain a copy of Capital One’s response which includes the line, “Unfortunately, changes in the interest-rate environment or other business circumstances may require us to increase rates, even for fixed-rate accounts in good standing.”
Other issues should be of concern to this committee as well. My wife holds a Capital One-issued MasterCard credit card. Last October, she experienced a medical emergency and had to leave work to spend hours at a medical facility to receive tests and treatment. Arriving home later that evening, she immediately logged on to the CapitalOne.com website to pay her bill online. It was approx. 9:00pm on the due date. Although she made the payment on the due date, it was 6 hours past the 3:00pm cutoff time.
For being six hours late on her payment, she was hit with a $39.00 punitive fine labeled as a “late fee.” That late fee, when added to her account, pushed her balance over the limit by $16.00. It was at this point that Capital One added a second $39.00 fine in the form of an “Over the limit fee” to her account.
In tears, my wife called Capital One and explained her situation and the emergency medical treatment. She was told the late fee was not going to be removed, she was late and that was that. They did tell her that as a “courtesy” they would remove the over limit fee on a one-time-only basis. Ironically, at the same time, my wife had a credit balance of over $300.00 for her overpayment on the total balance of her Capital One Auto Loan.
The NFL does not allow one team, in the midst of the fourth quarter, to unilaterally move their end zone 20 yards in their favor just because they don’t like the point spread. The rules are laid out before the kickoff, and the umpires enforce the same rules for both home and visiting teams for the whole contest. It’s time for legislation at the federal level that tells the credit card industry, “Game Over” to unilateral, one-sided, rule changes.
As a registered Republican, it has typically been my philosophy that business and commerce flourish and perform better with minimal government interference. However, when an industry sector proves time and again that it is unable to police itself and behave and engage in fair and ethical trade practices, legislative intervention is required.
With some progress in our consumer credit laws, and reform of the monopolistic credit scoring cartel controlled by the Fair, Isaac, and Company (“FICO”), perhaps once again consumers can have a level playing field in doing business with credit card issuers.
The Credit Card Bill of Rights is an excellent pro-consumer piece of legislation that would:
- Ban arbitrary rate increases
- Force creditors to provide 45 days notice of any rate increase
- Ban double-cycle billing
- Empower cardholders to set limits on their cards and ban over-the-limit fees once that ceiling is reached
- Ban excessive fees
- Ban lending to subprime borrowers
- Require creditors to mail bills at least 25 days before the due date, instead of 14 days as currently required
- Require creditors to apply payments first towards high interest items
You can see why the credit card companies were pulling out all the stops to harm this bill in any way possible. What is more surprising and disappointing is that members of the Financial Service Committee would help muzzle consumers whose only desire was to share their personal experiences. Congresswoman Maloney has vowed that “regular people” will testify at a future date.
Credit Slips Goes to Washington [Credit Slips]
Mr. Autrey Speaks for Himself [Credit Slips]
Credit Card Hearing Starts With a Surprise [Alpha Consumer]
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i can has blogs?
@JiminyChristmas:
First off, Republicans AND Democrats as per the OP. This was a request approved in a bipartisan manner. The credit histories of the complainants are material, factual evidence in the discussion – if it cannot be proferred, so be it. I suppose the backers of new legislation will have to make the case for this “bill of rights” without evidence.
@darkclawsofchaos: I fear my second sentence wasn’t enough of a sarcasm tag. If the testimony is false, there are methods of uncovering it without this sort of thing, which just seems intended to have a chilling effect.
@5h17h34d: Yeah, BofA is CONSTANTLY changing my due date. It pisses me off, and not just because it’s sleazy, but because I like to sit down and pay bills twice a month, not “whenever BofA feels like sending us a bill.”
I mean, honestly, they’re sleazy AND they’re adding a ridiculous amount of inconvenience to my life. They’re like telemarketers calling at dinner, going out of their way to interfere with my ability to conduct my life in an orderly fashion. (It’s our backup to the Amex, and only until we get to a point level convenient to cash out at.)
And I’d really like that 25-day mail thing. Mail problems suck.
@UpsetPanda:
I used to do that too. But I have at least one credit cards where the due date is around 7-10 days before the month close, so if I paid my statement when I got it, there were a couple of times where the payment hit before the month close, making two payments in one month and being “late” on the following month.
Then there is the card I finally paid off and closed that had a 24-day billing cycle.
Monthly bill my Aunt Fannie. That’s 15 payments a year. My lesson of 2008… Credit card companies are bad, m’kay.
@Mr ninethree
Oh stop your whining. It’s idiots like you that contribute to exaggerated fees, higher interest rates, and the overall crumbling of our economy. Any chance you have a sub-prime mortgage and ‘forgot’ when the rate resets?
The first time you payed your bill and were dinged a late fee, I sympathize with you. Really, I do. But then you should have seen if the ‘two days to process’ included weekends and to see what ‘days’ actually meant… does it count as a day if you pay at 12:30 pm, or 3:00 pm? Many banks/cards only consider a payment made on that day if made by certain time… And the due date is not ANYTIME during that date… it varies…might be by 1 pm that day or by 6 pm that day (in a certain timezone). So don’t blame Best Buy or the guy in India because you didn’t bother checking how long things take to process. READ THE FINE PRINT.
And why you want to make payments of $30 a month or so on a balance of almost $700 (at least $500 before late fees and accrued interest) isn’t my business…but you don’t seem to have ANY reason to complain (except the first time you were dinged for late payment).
Oh, and your English is WRONG! “…there rediculous fees…”
Don’t you mean “…Their ridiculous fees…”
Hate to blame the customer, but 2 out of the 3 times are your fault. Stop crying.
And make sure you are right before criticizing someone’s grammar.
@landsnark: a non-douchebag Republican
Is there such a thing?
i don’t see what the problem is. the guy is testifying about his credit cards so whats the harm? He also gets no sympathy from me about his wife. What happened to the other 30 days where she could have paid the bill? i do believe that one change that should be instituted more than any other is that if a credit card raises your rate, it will only apply to future purchases on not the balance that is already on the card. The balance should stay at the old rate until paid off. this would give people the chance to continue to have the old rate and stop using a card if the rates increase.
If fair is fair. Shouldn’t the so called public servant (congressman) have to provide his credit history to the public also? BTW, I believe that should be REQUIRED to run for ANY public office.
Ah, a football analogy… The only way a congressman can understand your woes…
[www.rawstory.com]
Can you stopped use LULz Catz.
Seriously, fucking lame.
Keep using LOL Cats. Seriously, fucking hilarious.
man, all you people have crappy credit cards. I’ve had great online experiences with both USBank (REI Visa) and Citibank (WaMu Visa).
I pay online, and I always pay in full, so I never accrue interest. I have no idea how they deal with less than paying in full, so take that as a caveat. But among the things they do really well are (1) as long as I pay by the due date, I’m good to go [tho I typically do pay earlier just to save my butt], (2) they don’t have any of that “pending charge” crap — they show me exactly what has cleared and been charged to my account, and (3) if something doesn’t clear before the bill goes out, even if I charged it before the bill due date, it just goes on the next month’s cycle.
Also, I’ve never had them move a due date up. My statement comes out on the 26th of each month, and I have to pay by the 15th. I try to pay by the 2nd just so that I never have to worry about it in case something crappy happens (my payday is on the 1st of each month). If they moved the due date 10 days, I’d have to pay pretty much immediately after getting the bill, so I don’t see how they’d be able to do that more than once, unless they also gave me shorter billing cycle.
In short, I’ve found that I am quite happy with my credit cards, and I hope I never have any of the medical/money emergencies some of the folks here seem to have.
@5h17h34d: That is ridiculous. And I do get the feeling my cards keep moving their due dates up a few days every month. So if you paid them immediately, as someone here suggested, pretty soon you’d be paying them 2x/month. The whole point for me of having a credit card is the convenience of paying everything once a month.
@Serolf Divad: I finally gave in and started paying online when they started mailing my bills to me a week before the due date. God forbid I was busy or away for a day or 2, I risked being late if I mailed in the payment. So credit card companies:1. I still pay in full every month or pay only zero interest installments, so I am still a “deadbeat” in their eyes.
@deedrit: OK, fair enough. But then shouldn’t the credit card companies ALSO have to provide evidence to back up all their claims? They testified for 3 1/2 hours and made a lot of statements that needed to be verified or clarified. But their statements were taken completely at face value.
Rule of thumb… if you can’t afford it and won’t be able to any time soon then you probably shouldn’t be buying it.
I have a Discover card and their customer service is friggen awesome. I’ve had problems with payments and stuff like that and after clear explanations to them they always get stuff resolved. I don’t even know what my interest rate is, but I do NOT carry a balance on it for any reason.
My credit card company allows me to go to their website anytime and set up a payment for the due date. Means I go ahead and do that as soon as I get my bill, and the bill actually gets paid on the due date, so I maximize my float.
Rule of thumb: if, like me, you pay your balance off in full each month and always send payment the moment you receive the bill, you can bloviate about how you’ve never gotten screwed over by your credit card companies because their nefarious practices involving random interest-rate increases, late fees and due date changes don’t affect you.
It’s fun being Marie Antoinette — until they go all off with your head….
I am lucky enough to have accounts with both the best and worst credit card companies in the industry. USAA, as others have said, is a fantastic company to do business with. They’ve never raised my rates, are always helpful when I call and have a question, and have dirt cheap auto and renter’s insurance. If they had more branches I’d probably do my banking there as well.
Capital One, on the other hand, has done nothing but dick me over since I got the card. Despite always paying my bills on time, Capital One saw fit to raise my 9.99% “fixed” rate up to the high 20′s. When I called up and asked why, the lady rudely told me “well you don’t carry a balance so what do you care?” Umm…because potentially I might have to carry one in the future and don’t want to pay interest rates that would make a loan shark blush? To this date I’ve never got a satisfactory answer for the rate increase. If it weren’t my oldest credit card I would have canceled it long ago.
@JiveMasterT: Yeah, but with a Discover card, it’s easy not to carry a balance since it’s not accepted anywhere. My Carte Blanche and Diner’s Club cards don’t carry balances either.
When you go to pay your Capital One online, the posting dates are available via a click, then I’m pretty sure that they appear onscreen during the confirmation and on the screen with the details. I don’t know why they raised Mr. Autrey’s rate, but his wife really has no excuse for not knowing that payments have to be made before 3pm, Virginia time.
@UpsetPanda:
More than likely he can say it correctly so you’re comparing apples & oranges.
@deedrit:
There have been multiple stories *on this very website*, with hard evidence, about CC companies changing the rules mid-game.
My former credit card used to send thier statements just a few days before they were overdue.
I didn’t stay with them very long.
@ADismalScience:
First off, stop being such an apologist for bad behavior. This was clearly intended to, and clearly did, have an intimidation effect. If anyone wanted to contest the truth of what the individuals (intended to) say, the individuals were going to talk – you know, statements made out loud that can subsequently be easily verified or disproved by anyone. It’s not like they were going to whisper secret coded meanings that required a decryptred transcript beforehand. As cuiusquimodi points out, lying in Congressional testimony is a federal offense anyway, so lying is not exactly likely. The speakers’ entire credit records and financial history don’t need to be ‘released’ in the name of fairness. Only the transactions actually testified about could possibly need verifying – and everyone will know about those transactions as soon as the speakers open their mouth, signed waiver or no.
Waving your hands and pointing to totally unrelated quarterly financial reporting obligations of the credit card companies is entirely missing the point. Yes, those companies do file some form detailing profits and losses somewhere, but so what? That has nothing to do with the subject of their abusive credit card practices. The consumers who were going to testify file taxes with the IRS, so by your logic, hey -they’ve put out the requisite records – what are you still complaining about?
Finally, if the committee was going to make ridiculous, intimidating demands, how about some consistency? As Elizabeth Warren aptly points out, “fair is fair” doesn’t apply when the Credit Card Cos. weren’t required to provide any records, data, or verification at all for any of their testimony, much less sign a release forever granting other parties the rights to see their underlying data. Why not say “fair is fair,” and actually require the Credit Card shills to actually put up data for B.S. assertions like “this legislation will cause rates to rise xyz percent” before they are permitted to testify.
And in a final sweet note of poetic justice, at the hearing Rep. Spencer Bachaus (R-citibank) said that there was originally a “bipartisan” agreement to require these consumers to sign the waivers. Then the Democrats changed the terms of the deal “after the fact.” Gosh, it must really be sucky and unfair when someone (or some credit card company) changes the terms of an agreement (or credit card rate) on you unilaterally without notice “after the fact.“
As a registered Republican, Steven gets NO sympathy from me, because, STEVE, THAT BEHAVIOR IS EXACTLY WHAT YOU VOTE FOR. Every registered Republican needs to realize that by voting that way they vote for abusive Anti-consumer legislation that gives companies the right to bend us all over and not use lube – ever.
If you want consumer rights, do NOT vote Republican, ever! duh….
You know maybe I’m just lucky but I have never had a problem with my Credit Card (I have a Wells Fargo Platinum Card). I decided to get this card my sophmore year of college in 2003 and have never had a problem concerning it. In fact I have been only pleased with it 99% of the time. There have been times when I have gone over my limit and been charged a fee. I knew you would get charged a fee for doing so but I was being irresponsible. I was stupid with my card for a little while. However about a year after owning it a took charge and started making more than the minimum payment on it (25.00) and now just keep a little balance on it too keep Wells happy and the card in good standing. My payment is always due on the last day of the month, unless of course the last day is on a weekend then it is due that friday (duh! banks only PROCESS transactions when the Fed is open which is only on business days). Really if you want to avoid the 2 day lag time then just go to the branch and make the payment thats what I due on the 15th of every month on pay day. I think we all need to take a little charge of our credit cards and stop expecting those company’s to kiss our ass cuz it isnt going to happen. They are in the business to make money, the sooner you understand that the sooner you’ll stop screwing yourself with minimum payments and paying the bill on or the day before the due date. If your CC is with a company out of your immediate area then go to a local bank see about transferring the balance an cutting up your old card. I believe this will increase your convenience and relationship with your bank anyway. Thats all I got really, any discussion concerning this is most welcome! Forgive me for my grammer and spelling…I rarely spellcheck.
When I see 20% interest rates, it makes me want to return to the medieval practice of burning people at the stake for the sin of usury. Seriously, I’m not being hyperbolic. The concept that usury was bad and not just good business was, I think, really really good for society.
Also, those of you feeling very wise for having instituted reasonable systems to ensure that your credit-card payments are never late or unaffordable, wait until something really disruptive happens in your life, like an unexpected job loss, or a long, serious illness. See how much your history of regular payment counts for…
well lets see when something unexpected happens your supposed to have set aside money in a “savings” account. This money is used when things take a turn for the worst or when your accruing money for a sizable down payment on a car or home so your not screwed with a high ass payment each month. But hey if you want to keep bitching rather than taking care of priorities go on ahead.
Also if you see a card with a high rate that you don’t agree with…do yourself a favor and DON’T get the card.
The waiver did backfire. It made the news, so the credit card companies looked bad anyway. I got rid of my credit card years ago. No need to owe money right now.
@ShanghaiLil: Exactly, which is why I don’t have one. The convenience of such is being outweighed by the hassle.
People seem to be missing the point. Yes, these folk got themselves into trouble but the CC companies asked for it giving CC’s to people who probably shouldn’t have them. There WAS a time when that happened you know. The fact that they tried to muzzle these people only serves to PROVE the point that the CC companies are reaping what they’ve sowed but they certainly don’t want the public to know that. How long until Bush is gone and an actual real live adult in the White House can undo the damage? After all, he DID stack the deck in their favor by changing the Bankruptcy laws no?
@ADismalScience: Because the general public has certain rights to privacy in matter such as this. A listed company, not so much.
USAA is not only for military and former dependents – it’s any commissioned officer. My father used to be an FSO (Foreign Service Officer) so he got USAA, and as a result, me and my siblings do as well.
@silentnight913: as far as I can tell, USAA is only for military members and their families?
No, Congress men may join as well.