(Below is an EXCELLENT article I read back in late 2009, and written by David Segal (a/k/a "the Haggler"), an outstanding financial affairs writer for the New York Times online edition. David has a long history of thorough, in-depth, no-holds-barred reporting on matters relating to consumer protection. This article is every bit as relevant today as it was 3 1/2 years ago, and raises excellent points concerning the "tricks and traps" of credit card billing statements. The "Bottom Line?" ... READ YOUR MONTHLY STATEMENT! - and don't be shy about challenging any peculiar, unexpected and unexplainable charges! - CRQ)
THE HAGGLER - "The Great Unknowns of Credit Card Bills"
By DAVID SEGAL ("The Haggler")
November 21, 2009 (NY Times Online Edition)
Three years ago, the Haggler’s credit card bill seemed to stop showing up in the mail. Another month went by — no bill. The month after that, still nothing. Each month, the Haggler would call the issuer, Bank of America, and pay over the phone, then ask the same question: "Why did you stop sending me a bill?"
"We’re still sending you a bill", came the company’s reply each time.
Guess what? The company was right. It just was sending the bill in a restyled envelope, with no trace of “Bank of America." In other words, it looked like junk mail, and the Haggler kept throwing it away.
Now, the Haggler can’t prove it, but this seemed like a brilliant, low-cost way to pocket a fortune in late fees.
“We are not trying to fool people, and we don’t change our envelopes on a regular basis,” said Anne Pace, a company spokeswoman. She explained that the change in envelope design was prompted by the 2006 acquisition of several credit card companies, after which the envelopes of all customers were left blank “for the sake of consistency.”
Consistency? It would be consistent, as far as B. of A. customers are concerned, to leave the envelope unchanged, no?
Seriously, the person who dreamed up the envelope switcheroo must wake up laughing. Ever since, the Haggler has held a grudging, vaguely appalled respect for credit card companies. Which brings us to our letter:
Q. "After a fraudulent $200 charge showed up on my Chase Visa bill in August, Chase closed the account, for safety purposes, and created a new one for me. When I called to activate the new card, a rep offered other services, including a change to the closing date. To prevent all my cards from coming due at the same time, I accepted the offer and moved up my closing date by 13 days."
"In September, I paid my balance in full prior to the new closing date, and I did the same in October. But my November statement showed a finance charge of $7.74, which I was told by a supervisor was a “legitimate” charge because I did not pay the full balance due by the moved-up due date."
"Untrue. The electronic statements — I paid over the Web — do not indicate any unpaid balance. But Chase will not remove the charge."
"I do not need the $7.74, which I have paid along with the total balance on the card. Once this is recorded, I will cancel the account."
"But I wonder how many others have accepted this “free and convenient” service of a moved-up closing date, then incurred a finance charge."
Charlotte Bell
Milford, Conn.
A. The short answer is that we will never know. The Haggler got in touch with Chase, and the company’s e-mailed response was so terse that the generic, legal mumbo-jumbo underneath it was actually three times as long. Henceforth, the Chase Legal-Mumbo- Jumbo-to-Content Ratio will stand as a new way to accurately quantify the lameness of a corporate explanation.
In this case, we have a C.L.M.J.C.R. of 3.
“Because of customer privacy, I cannot discuss customers or details about customer accounts,” wrote Tanya Madison, a spokeswoman. “However, it is the policy of Chase that if a systems error is made, a refund is promptly given to the customer subject to that error.”
Ms. Bell, of course, was happy to waive her privacy rights, for the purposes of this column, which makes those rights a ridiculous fig leaf for Chase to hide behind. Actually, fig leaf is too dignified in this context. This is more like a Fig Newton.
A company rep was more expansive in a call to Ms. Bell after the Haggler’s inquiry. She blamed a computer mistake, said the $7.74 fee would be removed and added that Chase hoped to learn from this error.
Fingers crossed. The backdrop of this boo-boo is an industry that for the last 10 years has been refining the low art of late-fee shenanigans. Edmund Mierzwinski, consumer program director of the U.S. Public Interest Research Group, says that starting in 1999 — when the repeal of the Glass-Steagall Act allowed commercial and investment banks to merge — credit card companies started looking to late fees for profit.
“It began with regulators allowing banks to say that if a bill arrived on the due date but after a certain time on that day — like noon — then it was late,” Mr. Mierzwinski said. “Now, how many people know when a bank checks their mail?”
Some banks started moving up due dates without notice. Others required that payments sent via overnight mail use a special address, so that if you sent a payment by FedEx to the regular address, you were late.
Getting the picture? In May, Congress passed the Card Accountability, Responsibility and Disclosure Act, which curtails some of these practices. But critics predict that the elimination of some fees will give rise to new ones.
Vigilance is recommended, as the coda to Ms. Bell’s story attests. Last week, after Chase removed the $7.74 fee, she received a letter stating that she’d mistakenly been credited twice for the $200 fraud that led to the cancellation of her original card, so a $200 charge would be added to her next bill.
Actually, the second $200 credit was not from Chase — it was from a shoe store.
Ms. Bell contacted Chase and the company removed the charge.
“You can’t make this stuff up,” Ms. Bell said.
E-mail the "Haggler" at: haggler@nytimes.com.
Keep it brief and family-friendly and go easy on the caps-lock key. Letters may be edited for clarity and length.
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