Consumerist
personal finance
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Debt
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personal finance
"People are not willing to modify their lifestyle in order to live on what they earn - that is the real problem." Larry Winget, author of "You're Broke Because You Want To Be" on the root cause of the current economic crisis. [AllFinancialMatters]
capital one
Capital One All Hassle Credit Card
How hard should you have to work to pay your bills? No, not to make enough money to pay your bills, but to actually give your money to someone else? Reader Matt has been trying to convince Capital One to take his money for several months now. They're not taking his money, or his calls, but they are willing to send him to collections! Check out his story, inside. More »
ebay
Man eBays $103,254.11 In Debt
This lady is trying to eBay her family's $103,245.11 in debt. It comes with her house and car (loving family not included). I guess it could be useful if you're trying to decrease your tax liability, or you just want to feel part of the credit crunch crisis. Maybe you could work out a Prince and the Pauper thing.
My Debt, all of my worldly bills comes w/house and car [eBay] (Thanks to Ryan!)
American Express' profits fell 6% as more Americans defaulted on their credit card debts. [NYT]
outsourcing
U.S. Debt Collecting Being Outsourced To India
The New York Times looks at the blossoming foreign market for debt collection services, and describes a call center in India where the employees are reminded to bring up the 2008 stimulus checks when they call U.S. households, and where everyone claps three times when the first "deal" of the day is made (""Rajesh, for $35 a month for three months," the supervisor yells across the center.) More »
education
Sallie Mae Stops Student Loan Consolidation, Will No Longer Pay Origination Fees On Stafford Loans
Consolidation loans are no longer profitable for Sallie Mae, so it's saying goodbye to them. SmartMoney points out that ultimately this shouldn't matter for students taking out new loans, since the original point of consolidation—converting lots of variable rate loans into a nice predictable fixed rate loan—is no longer relevant (all federal student loans are now disbursed with fixed interest rates.) SmartMoney says if you still have variable rate loans you need/want to consolidate, check out the government's consolidation offering—"You're likely to pay the same consolidation rates you'd pay if you did so with Sallie Mae," they write. More »
debt
You Have $2.54 Trillion In Consumer Debt
The amount of new consumer debt is increasing more slowly than in previous months, growing only $5.2 billion in February, says Bloomberg. It sounds like a lot of money, but it's a much slower rate of growth than the $10.3 billion increase in consumer credit seen in January. More »
leaks
An anonymous tipster sent us AOL's 153 page internal collections guidebook for prying money out of delinquent account holders. The guide shows that AOL is following some of the debt industry's most egregious collection tactics by encouraging agents to deceive and lie to customers. After the jump we present AOL's scare tactics, tricks to negotiating a substantial discount, and the full collections guide.
More »
Exclusive: AOL's Collections Guide Encourages Agents To Lie And Deceive
An anonymous tipster sent us AOL's 153 page internal collections guidebook for prying money out of delinquent account holders. The guide shows that AOL is following some of the debt industry's most egregious collection tactics by encouraging agents to deceive and lie to customers. After the jump we present AOL's scare tactics, tricks to negotiating a substantial discount, and the full collections guide.
More »
More debtors are behind their loans than at any time since 1992. [American Banker's Association]
elder abuse
A volunteer in Chicago claims that her client, a 65-year-old woman with dementia, was given a GMAC auto loan for a new 2007 Pontiac, even though she only makes $900 a month and has no driver's license. Now the car has been repossessed and the car lot is saying she owes them nearly $8,000.
More »
GMAC And Car Dealership Scam Old Lady For Nearly $8,000
A volunteer in Chicago claims that her client, a 65-year-old woman with dementia, was given a GMAC auto loan for a new 2007 Pontiac, even though she only makes $900 a month and has no driver's license. Now the car has been repossessed and the car lot is saying she owes them nearly $8,000.
More »
recession watch
At What Point Is A Recession Really Just A Depression?
Marketplace Money asks former Labor secretary and Berkeley professor Robert Reich to explain the difference between a recession and a depression—and to tell us what to do about the ugly consumer spending paradox we find ourselves in.Vigeland: What are the traditional definitions of a recession first and also a depression? How are they different?More »
insiders
C writes:
Confessions Of A Debt Settlement Company Worker
C writes:After spending a year (one of the worst of my life) working at a debt settlement company, I feel that I am obligated to warn as many consumers as possible about how badly you can ruin your financial situation by using one of these companies. My new job is at an all natural bakery, I no longer wish to swerve my truck into a tree on the way to work. Debt settlement is the process of eliminating your debt by ceasing payment to the creditor, and then negotiating with the card companies or collection agency to pay less than the balance owed. The debt settlement company charges a rather hefty fee for this service; however, the consumer should be saving money on the deal because they are paying significantly reduced balances to clear their debt. This is how it is supposed to work. This is not how it usually works.More »
consumer rights
38.6% Of Reported Debt Collectors Demand More Money Than Is Legal
Debtors have rights, and sometimes they get violated. The FTC released its annual Fair Debt Collection Practices Act report, part of which documents the number of complaints they get about debt collectors violating consumers rates. FTC received 70,951 DCPA violation complaints in 2007. Of them:
38.6% demanded more money than allowed by law
19.7% harassed consumers with repeated calls
9.2% used obscene, profane, and abusive language
2% called before 8am or after 9pm
.3% threatened violence
6.5% falsely threatened lawsuits
13.2% called third parties repeatedly to get information about the consumer
Here's more information about the FDCPA. You can lodge complaints with the FTC about FDCPA violations by calling filling out this online form or calling 1-877-FTC-HELP.
debt
Should I Get A Debt-Consolidation Loan?
Consumer advocate radio show host Clark Howards thinks most people are kidding themselves when they spring for a debt-consolidation loan:
It's been my experience that when people do a debt-consolidation loan, all they really end up doing is rearranging the deck chairs on the Titanic. With one transaction, their credit card bills suddenly stop, and those people then say, "Oh, how nice, it's all so tidy now, I now just have everything on one convenient bill."More »
recession watch
Most Americans Say They Will Not Spend Their Stimulus Checks
The majority of Americans plan to save their stimulus checks or use them to pay off debt, says a new survey.A CNN/Opinion Research Corp. poll found that 41% of respondents plan to use their rebates to pay off bills, and 32% will put the money in savings. Just 21% of those polled intend to spend the money, while 3% said they will donate the extra money to charity.This could cause some problems:
Jared Bernstein, an Economic Policy Institute senior economist, notes that taxpayers have in the past spent half to two-thirds of their rebate checks. However, he points out that the current economic conditions are unique.More »
debt
Buffalo, Where The Debt Collectors Do Roam
Who would've guessed that credit card debt and the subprime meltdown would be the saving grace for one of New York's decaying cities? Buffalo now hosts over 100 collection agencies that employ 5,200 people who spend their days prodding delinquent consumers to pay their bills. The cottage industry relies on the "strong work ethic [and] even-handed temperament" of Western New Yorkers, who once powered long-departed industrial giants like Kodak and General Electric. More »
debt
