I am currently embroiled in a minor dispute about HSBC credit card. They treated me shabbily and then continued to assess fees. And I continue to protest and am willing to bring it to small claims or mandatory arbitration. I am a stubborn SOB when I am in the right.
- National Arbitration Forum is reponsible for the overwhelming majority of cases (Citibank, Discover, Chase), etc.
- In addition to NAF clauses being included in credit card contracts, they are also included in home contracts and (soon apparently) health insurance forms.
- here is a fee collection schedule set by the NAF(PDF). It’s both outrageous and hilarious.
- according to the article, creditors win their cases 99.8% of the time.
- the reporters found a Power Point used in sales presentations bragging to bank clients a “marked increase in recovery rates over existing collection methods.” Another quote:
- here’s another article by the same reporters.
- here’s an mp3 by the same reporters talking about how they prepared the article.
- see also these interviews with debt/credit experts on 2004 PBS Frontline episode, “The Secret History of the Credit Card”. I recommend Elizabeth Warren’s interview especially.
A current NAF arbitrator speaking on condition of anonymity explains that the presentation reflects the firm’s effort to attract companies, or “claimants,” by pointing out that they can use delays and dismissals to manipulate arbitration cases. “It allows the [creditor] to file an action even if they are not prepared,” the arbitrator says. “There doesn’t have to be much due diligence put into the complaint. If there is no response [from the debtor], you’re golden. If you get a problematic [debtor], then you can request a stay or dismissal.” When some creditors fear an arbitrator isn’t sympathetic, they drop the case and refile it, hoping to get one they like better, the arbitrator says.
The firm goes out of its way to tell creditors they probably won’t have to tussle with debtors in arbitration. The September, 2007, NAF presentation informs companies that in cases in which an award or order is granted, 93.7% are decided without consumers ever responding. Only 0.3% of consumers ask for a hearing; 6% participate by mail.
I have a feeling that reporting on this credit card dispute will start to be a regular feature on this blog. For the record. I’ve had two other cases in my life where I’ve disputed bank cards/wrongful debt.
The first was in 2002 when I was out of work and Citibank offered me a debt payment plan, and then withdrew it or changed their terms or I never quite figured it out. I requested numerous times in writing for Citibank to send the original legal agreement and the terms of the repayment plan, which they refused to do. Eventually I gave up, mainly because I was not in good shape financially but also because I had no way of confirming any statement or interpretation made by a customer rep made over the telephone. I took good notes, but so what? Lesson learned: communicate only in writing.
The second time was in 2006 when outrageously enough AT&T refused to provide telephone service and Internet service because of a theft of identity issue. I had to pay the criminals’ debt and then “prove” that I was not responsible in order to receive the refund. AT&T was the only telephone provider in the neighborhood and had the ability to prevent me from having Internet access, so I had to pay, like it or not. Eventually AT&T conceded their error, but only after 6 months of my complaining.
So I am ready for my next dispute. HSBC essentially sent me a form letter today denying my complaint. (The facts of the case are simple: I paid off a credit card in full in late March and wrote them asking to cancel the account. I received a written confirmation of this from an HSBC rep, but apparently the company has continued to assess fees and fees for the fees and fees for the fees for the fees….)
For those at HSBC reading this, let the record show that I am still waiting on them to provide a copy of the legal agreement. And I am ready to fight!