not excempt from this rule. There is something done or not done,
always. While the following article may not be the only reason it
portrays what may be the general attitude that brought this crisis
upon us. However there is something missing here. Those people who
were 'victims' to these practices agreed to them. You can never spend
more than you earn, it's basic economics. And on that a lot of people
need more education.
---------- Forwarded message ----------
From: "michaelrivera0619@gmail.com" <michaelrivera0619@gmail.com>
Date: Fri, 26 Sep 2008 08:15:58 -0400 (EDT)
Subject: CNN - Ex-bankers on pushing customers to rack up debt
To: "michaelrivera0619@gmail.com" <michaelrivera0619@gmail.com>
Cc: "michaelrivera0619@gmail.com" <michaelrivera0619@gmail.com>
Sent from michaelrivera0619@gmail.com's mobile device from http://www.cnn.com.
Ex-bankers on pushing customers to rack up debt
As an account manager for credit card giant MBNA, Cate Colombo spent
four years speaking to customers, answering questions about interest
rates and waiving late fees.
Kathy Ellingwood did the same. She lasted only a year and a half
before quitting this summer.
The women worked in different departments at the sprawling customer
call center in Belfast, Maine, yet they share similar stories about
aggressive selling tactics they claim they were told to use to push
cash advances, sometimes getting customers to max out their credit
cards.
"Every customer who calls in is a mark. It's a great big con," said
Colombo, who estimates that she alone sold almost a quarter of a
billion dollars in the four years she worked for MBNA before it was
bought in 2005 by Bank of America.
Americans now carry $850 billion in credit card debt. Consumer groups
are lobbying Congress to include better protection for credit card
holders, demanding legislation to prevent what they call unjustified
interest charges and deceptive practices, especially in light of the
massive financial bailout now being considered.
Colombo and Ellingwood said that within seconds of a customer's call,
they would have his or her entire credit history on screen, and they
were trained what to say to sell people money.
"I would say 90 percent of the time, people were pragmatic. They would
say, 'I don't need $100,000,' and we would find a way to convince them
they needed the money," Ellingwood recalled.
She said they would look for trigger words like, "I'm in financial
difficulty" or "I can't make my payments." Colombo said other triggers
were, "I have to send my son to college. My car is not running. I'm
moving."
Colombo said some people even asked about getting a $50,000 cash
advance -- usually at zero percent interest -- for a down payment on a
house. And although that's illegal, the former employees say they were
trained to get around it by saying, "I cannot give you money to use as
a down-payment on a home. However, what I can do is, I can deposit
some money into your checking account, and once it's there, the funds
are there, it's yours to do with what you please."
Bank of America told CNN, "Only customers in good standing and with
good payment history are able to access cash up to available credit
line."
But Colombo and Ellingwood say they were told to sell hard to
everyone. Once the customer agreed, they say, they would speed through
intricate disclosure notices. Among the details, how a zero-percent or
low interest rate could convert to as much as 28 percent if a payment
was even a day late.
"You're basically looking at people who need the money most, who may
not be able to afford it," Ellingwood said.
Colombo remembers having a conversation with one man in his 90s.
"He had all this available credit, maybe $100,000. I have my manager
screaming, 'Colombo, you need to sell. You need to sell. You need to
sell,' " she said.
Bank of America calls its terms "clear and transparent." But credit
card lending practices have now gotten the attention of Congress.
Consumer groups support a bill to curb what they call predatory
lending.
The American Banking Association opposes it, saying, "Consumers have
benefited from a competitive marketplace that allows for pricing based
upon risk."
Americans for Fairness in Lending, which put CNN in touch with Colombo
and Ellingwood, wants deceptive credit card practices included in the
financial bailout legislation that is now before Congress.
Its director, Jim Campen, said, "We haven't identified any illegal
practices. What we've seen are practices that are highly unethical.
It's extraordinarily common."
The two women say their conversations were monitored, and the more
they sold, the bigger their salaries.
"If you didn't do it, you got yanked off the phone," Colombo said.
She said a manager once yelled, "You let your team down. You let the
bank down. You let the stockholders down!"
Bank of America said it does not talk about individual cases but calls
the allegations by the former employees "incorrect."
Spokeswoman Betty Reiss said, "Our call center associates are focused
on serving customer financial needs and responding to questions about
their accounts."
But Colombo said her performance reviews -- which she provided to CNN
-- tell a slightly different story about selling tactics. In one, she
is told by supervisors to be more aggressive: "You cannot sell what
you don't offer." Another reads, "Understand the importance of selling
at the highest possible rate."
CNN asked whether the customer call center in Belfast was perhaps
operating independently; both women shook their heads and described an
environment in which call centers across the country would compete
with one another.
"I worked four 10-hour shifts. The goal was to make $25,000 an hour,
which is $250,000 a day, which is $4 million a month," Colombo said.
Although Colombo does not know whether the practices were widely known
at Bank of America headquarters in Delaware, she said this about her
immediate managers: "Everyone on that level knew what we were doing.
We were being told to do what we did."
Do the women feel guilty about what they did?
"Yes, without question," Colombo said.
"Absolutely," Ellingwood added.
Americans for Fairness in Lending said it wants the Senate to ensure
that consumers are protected from what it describes as the deceptive
practices of many of the same financial institutions likely to benefit
from the $700 billion bailout.
The Credit Card Bill of Rights passed the House this week. But it's
opposed by the banking industry and the White House, which said it
would lead to less access to credit and higher interest rates for
consumers. For its part, Bank of America would not talk about
individual cases or provide a copy of the disclosures that its
accounts managers read to customers over the phone. It also refused to
answer questions about training procedures for account managers at
call centers across the U.S.
However, the spokeswoman said the bank "has nothing to gain by
extending credit to people who do not have the ability to pay back."
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