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Manipulating a person; gaining their trust; abusing that trust and causing injury -- all for selfish ends. Everyone recognizes this classic
pattern of evil." --Uriel Wittenberg
The evil in this case is Providian Financial and Credit Card companies like Providian that exploit consumers. Their unethical and predatory practices need to be stopped.
As you know, the Truth in Lending Act (TIL), also known as Title I of the Consumer Credit Protection Act, was enacted to assist consumers in shopping for credit. The law's stated goal was:
"...to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him..."
The law is being undermined by financial institutions,like Providian Financial, hiding behind the credit card industry-backed disclosure
provision. They do this by "bait and switch", "low introductory rates", or ads for cardholders to "rebuild their credit rating" by opening a credit card account. These credit card companies gain the cardholders trust and then encourage the cardholder to increase their buying power by raising their credit limit.
What follows next is a confusing or loosely-veiled disclosure statement changing the terms of the agreement. The disclosure statement may offer an "opt out" for the cardholder to pay-off their balance or transfer the balance to another credit card. This sham recognizes that most cardholders
will not have either option reasonably available to them. Subsequently cardholders are seeing APR rates double and in many cases reaching
unprecedented levels of 29.99 to 35.99 percent.
This scenario is not limited to "sub par" accounts as one might assume. The number of complaints against Providian are not only alarming but suggest a "business strategy" designed to fatten profits under the protection of the "disclosure provision of truth in lending."
While the intent of the law may have been good, it unfortunately is heavily weighted toward profitable credit card companies like Providian at the expense of hard-working consumers. I am certain legislators made a legal assumption that corporations would be ethical in their business
practices. Unfortunately, this oversight has permitted such practices and abuses to become a business strategy for companies to earn more profits.
These practices force many lower-income and working class consumers into further financial hardship creating a form of "social darwinism" or
"economic racism".
"In the year 2000, while bankruptcy rates were declining, complaints about abusive credit card company practices resulted in at least four of the largest credit card companies, Citibank, Providian, Chase and First USA, settling multi-million dollar class action claims over deceptive marketing and interest calculation practices [American Banker newspaper, 2 Jan 2001].
Incredibly, even the normally somnolent national bank regulator, the Office of the Comptroller of the Currency, separately forced one of these banks, Providian, to pay $300 million in consumer restitution in a consent order where Providian agreed to settle charges that it "engaged in
a pattern of misconduct in which it misled and deceived consumers in order to increase profits. The OCC believes hundreds of thousands of consumers were harmed by Providian's activities, and that the bank profited as a result." [Link to OCC News Release 2000-49, 28 June 2000]. Yet, except for a modest credit card industry-approved disclosure provision, nothing in the bill would rein in these unfair, abusive credit card industry practices" - Edmund Mierzwinski Consumer Program Director (US PIRG 2001.)
Inspite of such settlements the abuses continue.
Practices like "dumping sub par accounts" in order to raise APR rates, unreasonable penalties for late, and overlimit fees are resulting not only in negative credit ratings for consumers, but also causing consumers to face higher rates for other credit. All of these practices are occurring "under the protection of our government" by the very provisions intended
to protect us.
"Remarkably, our society often permits prominent, successful Corporations (Providian) to maintain credibility and influence even when they are
clearly revealed to have offended in this way -- and have shown no sign of repentance" --Uriel Wittenberg (Respectable Evil).
Whatever lessons Providian learned from the 300 million dollar restitution payment ordered by the OCC in 2001 their unethical practices continue
unfettered by the government and it's agencies created to protect us.
While lenders should be free to quit extending further credit to customers who no longer seem creditworthy or to offer them new credit at a higher rate it should be unlawful to change the terms after the fact, This is unfair and unconscionable. It should also be unlawful!
We urge your strong opposition to these unfair, practices and support in amending the provisions of "truth in lending" to protect all consumers.
Sincerely,
Keith Gowton |
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http://user1292454.sites.myreg...
This petition is sponsored by the above website. The website is dedicated to fighting the cause of injustice and unethical practices by Providian Financial. |
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