Earlier this year, former employees of MBNA and Bank of America contacted AFFIL looking for a way to speak out about disturbing sales practices they were trained to use as employees. Their stories confirm what we’ve long suspected: that credit card companies extend credit to those who can’t afford it, and engage in a “tricks and traps” business model designed to max out cardholders and keep them on a debt treadmill as long as possible. We interviewed Cate Colombo and Jerry Young, here’s some of what they had to say:
You may have also caught them on Nightline last night or CNN this morning, and we’re hoping other news outlets and blogs will run the story as well.
The good news is that yesterday, September 23, the House passed the Credit Cardholders Bill of Rights, which is a good bill with substantive protections for consumers. As a form of companion legislation, our Partners in Washington are asking the Senate to attach credit card rescue provisions to the big “bailout” the Administration has asked for. These provisions would go along with some of the other common sense measures Democrats are proposing, such as limiting CEO pay, and allowing bankruptcy judges to modify mortgages (a change consumer groups have long pushed for). See Consumers Union for more details on how this would all work.
Americans owe almost a trillion dollars on their credit cards, a lot of it from interest and fees, and a lot of it from aggressive and misleading sales tactics like the ones Cate and Jerry describe. If Wall Street deserves a break in the midst of all this mayhem, I think these maxed out consumers do too.