Corporate Deception & The
Consumer Debt Crisis
By Barbara Woodcox
As everyone knows, consumer debt,
bankruptcy and default are at an all time high in the USA. If you were to take a
survey and ask people why this is the case, most of them would say it is because
consumers are spending beyond their means and using credit to buy things they
can't afford.
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Perhaps there is another reason
for the consumer debt crisis. Corporate deception is a major cause of
consumers' financial troubles. Their usury and deceptive tactics are
designed to drive their customers deeper and deeper into debt. Consumers
are led into debt traps by deceptive offers and raw deals. Here are just a
few examples to illustrate this point.
Fees, Fees, And
More Fees: Late fees, overdraft fees, over the limit fees,
application fees, policy fees, service charges, convenience fees.......
They just keep getting higher and higher! This is one way corporate greed
empties everyone's pockets, making it harder for people to pay their
bills. |
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Credit Card Company
Dirty Tricks: Credit card companies are always scheming to find ways to
increase consumer debt and keep balances as high as possible. In recent years,
they raised their late fees and over the limit fees to $30-$40. Now, they not only
have a due date, but a due
time, too. The payment can arrive
on the due date, but if it arrives after a certain time, a late fee is added to
the customer's card balance. Years ago, a card was declined if the amount
of a purchase was greater than the available credit. Now, the transactions
are processed so the company can charge over the limit fees. Credit card
companies try to make consumers late by changing the due date all of a
sudden (for example, it was due on the 6th of every month and you
didn't notice that this month it's due on the 3rd). They make up excuses to
raise your interest rates (your credit score went down, your balance is too
high, they changed their pricing tiers, etc.). No one ever gets a notice in the
mail telling them that their interest rate went
down.
It's the ever increasing greed of the credit card companies
that contributes greatly to the consumer debt crisis. They deliberately make it difficult
for people to pay off their balances. It's no wonder there is so much consumer
debt and bankruptcy! More on credit card company
dirty tricks.
Car Loans: Car companies make
an unbelievable amount of profit from the sale of their product. Yet they formed
their own finance companies and they charge interest on their loans. They know
what the banks would charge and they offer rates that are only slightly lower.
This is like paying someone for the privilege of buying their product. This is
pure greed and another contribution to the consumer debt crisis. After the 09-11
terrorist attacks, they started offering 0% financing and none of them went
bankrupt as a result. Now they're back to their old, greedy ways and bleeding
consumers with interest charges and unfair lease deals. Let's thank the car
companies for their contribution to the consumer debt crisis.
Health Clubs: A health club chain
advertises a "pay as you go" membership. People go to the club and sign what
they think
is a membership agreement. Later they find themselves buried in
a mountain of unexpected debt because they didn't realize that the
membership agreement they signed was actually a legally binding, three year
finance contract. This kind of deception is a major contributor to the current debt
crisis. More on health club contracts.
Same As Cash Deals: They call it
same as cash, but most consumers don't realize that it is really a deferred
interest plan. If you purchase a $1,000 item on a 6 months "same as cash" plan,
you have to pay the whole amount within 6 months. If you pay $950 but can't come
up with the last $50, you will be charged back interest on the full $1,000. The
deceptive "same as cash" deals lead people into unmanageable debt because they
aren't concerned about the interest rate when they sign up. The interest rates
are usually very high and can be 40% to 50%. Credit on a $1,000 item can cost
$500! People don't think of this when they hear the words "same as cash". This
kind of dirty trick is yet another example of how corporate greed is fueling the
consumer debt crisis. More information on Same As
Cash
deals.
Insurance Short Rating: This
is when consumers get charged for something they didn't even get. If you
find a better rate on your car insurance and switch companies before your
current policy expires, you are charged a percentage of the amount the company
would have received from you if you stayed with
them. This is one of many examples of the corporate pickpocketing that creates a
financial burden for consumers and makes it harder for them to pay their debts. With so many
corporate hands pickpocketing consumers, it's a wonder we're not all bankrupt
and living on the streets.
Cheap and Deceptive
Employers: In the job ads, "Unlimited Income Potential" means the employer isn't willing
to pay a wage or salary. You would have to work on their schedule and
on their terms, but they wouldn't have to
pay you for your time. Some job ads promising "Unlimited Income Potential" offer a
salary, but the employee has to give it all back to them for use of an office, phone,
supplies, etc. Earn "up to" $35,000 means you would be lucky if
they offered you $17,000.
It costs a lot to pay for housing, food, transportation,
phone, utilities, medical care, clothing and other basic necessities. Too
many employers are too cheap to pay their employees enough to cover even
their most basic needs. Any person who works 40 or more hours per
week should be able to heat their home in the winter and put food on the
table. If a person who makes $15,000 per year uses a credit card
to pay the electric bill, who is to blame? The underpaid worker or the
cheap employer? Eventually the underpaid worker will be buried in credit
card debt and harassed by collection agencies and then the only
alternative will be bankruptcy.
Cheap employers lay off a whole workforce so they can replace
them with cheap labor. When people get laid off, they don't have enough money
to pay their debts, no matter how much they want to. This is the
cheap employers' contribution to the national consumer debt crisis and the
vast majority of cheap employers is corporate America.
These examples of the cause of our nation's consumer debt crisis
could go on and on. People are tricked into deals they never would have accepted
if they understood how the deals really work and they find themselves so deep in
debt that they can't dig themselves out. People lose their jobs for no good
reason and can't pay their bills. If a person can hardly afford a loaf of bread,
how can they be expected to pay for the unanticipated charges that result from
corporate greed.
Consumers are often blamed for the debt crisis. It is said
that people are spending beyond their means and using too much credit.
With all the corporate pickpocketing and con artistry that goes on,
doesn't it seem that the main cause of consumer bankruptcy, defaults, and
debt is corporate greed?
