Ed Anderson, former CEO of the National Arbitration Forum was apparently asked about criticism that NAF arbitrators who ruled in favor of consumers over creditors were no longer selected to arbitrate NAF cases.  One would expect to hear a denial from NAF that they do not allow that to happen.  Instead, Anderson seems to see no problem with the practice.
 

He is quoted as saying “… dismissing arbitrators is no different from jockeying for more business-friendly judges, information that credit-card companies are more likely to have.  In any case, in any system there’s power of knowledge  … that’s why you try to hire the best informed lawyer.”
 

Our system of selecting judges in Iowa is nothing like what Anderson describes.  There are no judges in Iowa who are removed for ruling in favor of a consumer.  In Polk County there are systems in place to avoid judge shopping. 

In any event, I’m not sure why it is even debatable whether a system where creditors almost always win over consumers is fair.  NAF claims arbitration is a good system because it is fast and cheap.  While that claim is patently false, it doesn’t follow that fast and cheap should be the primary concern for the justice system.  Lynching was fast and cheap—that doesn’t mean it was a superior system of justice.

Any civil justice system that allows creditors to remove arbitrators who rule against them even once is not fair and impartial.  It is an absolute outrage that Congress allows this fiasco to continue.

Here is a link to the article.

http://www.startribune.com/business/18812529.html

If you are an Iowan, I'm sure you have seen a vehicle parked outside a mall, a sporting event, a school activity, parked in your neighbors driveway or wherever and the vehicle has a dealer license plate.  If you like the car, ask the driver how much it is and if you can take it for a spin.  The car is for sale--or at least it is supposed to be.  There should also be a used car window sticker on the vehicle, because used cars offered for sale are supposed to have a window sticker.

Call me a skeptic, but it sure looks to me like there are a lot of cars with dealer plates being driven in Iowa by car dealers, car salesman and their family members as personal vehicles for their own personal use.  The dealer plate appears to be little more than a means to avoid paying use tax the rest of us pay to license our vehicles each year.

I suggest closing this loophole and using the extra revenue to maintain Iowa's bike trails.

I am repeatedly contacted by consumers whose wages are being garnished by debt collectors.  They received collection letters, right to cure letters, were served a lawsuit, defaulted on the lawsuit and now they are seeking help because their wages are being garnished for a debt they did not owe.  Unfortunately, options are now severely limited. 

Even worse, many of these consumers had obvious defenses to the collection lawsuit resulting in judgment and garnishment of their wages.  Others have missed opportunities to settle the debt for a fraction of the judgment amount.

Dealing with debt requires a plan.  And it would help if the plan you come up with doesn't include wasting limited resources paying a crooked debt settlement company or paying off time barred debt.  Remember, there are always more options earlier in the process than there are later on. 

Get competent help as soon as possible when dealing with debt.    

Sometimes debt issues cause life issues such as health, marital or family problems.  Other times life issues cause the debt issues.  I am frequently contacted by clients  experiencing stress, anxiety, depression or feelings of being overwhelmed and totally helpless.  My undergraduate degree is in social work.  The education and experience comes in handy in a consumer law practice.

When you are overwhelmed, it can be helpful to get a plan.  You need to see a way out of your situation.  For debt issues, prioritize bills and come up with a workable solution.  Consult with somebody who can help you and who knows what they are talking about.  It is pretty rare when there is no solution at all to a client's debt problems.  For example, don't let abusive debt collectors determine your family budget or prioritize your bills.  It has been my experience the most abusive collectors should nearly always be a low or no priority for payment, yet consumers repeatedly send 25% of their income or more to these squeaky wheels.  

Making lists can help with being overwhelmed.  You cannot do everything at once.  You will become depressed thinking you have to.  Break big tasks down into smaller parts.  Put these tasks on your list.  Cross off the tasks as you do them.  Delegate what you can and cross it off.  Cross off what really doesn't need to be done.  If you just can't get yourself motivated to do anything, try to do at least one of the small tasks on your list and cross it off.  Reward yourself in some small way for making progress.  You will soon feel a sense of accomplishment and feel like you are actually getting things done.  As you see more and more things crossed off, you will feel less and less overwhelmed.

Put exercise on your list.  You want to be healthy and feel good about yourself.  Exercise relieves stress.  Find something you enjoy doing or you will not stick to it.  Get friends to exercise with you.  You have no friends?  Make some new ones while you exercise.  Don't have time?  Of course you do--you're reading this blog aren't you?  Exercise is a higher priority than reading this blog. 

Put learning something on your list.  Learn something every day that will make your life easier and more productive or that will make you a better person. 

I talk to hundreds of consumers every year with a wide range of problems.  Ironically, the ones with the biggest problems are not always the most stressed.  It is not unusual for clients who have the easiest problems to deal with to be suffering the most emotionally. 

Get help if you need it.  Get a plan.  Make lists.  Attack your list one small step at a time.  You will soon feel better about yourself and will be less overwhelmed.  

Thought I'd do a brief review of the news this week to find a topic to write about.  Let's see ... Hannah Montana (Miley Cyrus) got into a bit of a jam with some photos that everyone seems to care a lot about ... Roger Clemens denies he cheats on his wife--now he'd rather talk about steroids ... a giant squid has 11 inch eye balls ... Teri Hatcher is said to be an over exerciser ... And ... if you dig into the news long, hard and deep enough  ... in April 49 Americans and over 100 people were killed in Iraq. 

Is the surge working or are we just mistaking success for out of sight, out of mind?  In an AOL poll on Iraq, 15% of those responding think the U.S. mission in Iraq (whatever that is) will be accomplished in five years.  Another 13% think the mission will be accomplished in ten years.  72% think the U.S. mission in Iraq will never be accomplished.

This song from Coven seems to sum up this war--especially where the stated purpose for going to war in the first place was a lie, and where oil fields were secured before weapons arsenols containing weapons that would later be used to kill our troops. Haliburton, Chaney's alma matre, then gets lucrative contracts and becomes a Saudi corporation to avoid paying U.S. taxes.

Here are some lyrics and a video link:

  
On the mountain was a treasure
Buried deep beneath the stone,
And the valley-people swore
They'd have it for their very own.

          ***
Go ahead and hate your neighbor,
Go ahead and cheat a friend.
Do it in the name of Heaven,
You can justify it in the end.
There won't be any trumpets blowing
Come the judgement day,
On the bloody morning after....
One tin soldier rides away.


http://www.youtube.com/watch?v=qCCR2huE2m8


Well, let's get back to the really important stuff and see what's in the rest of the news.  A Big Mac has a couple hundred less calories than a Whopper with Cheese ... Hillary Clinton is offended by Obama's pastor ... Obama is offended by Obama's pastor  ... John McCain is offended by Obama's pastor, but really likes the fact he is out offending  ... Sally Fields supports Miley Cyrus ... Bill O'Rielly at Fox, after careful and repeated viewing of the photos, does not -- he is "outraged" ...

And how many 20 year old kids will die in Iraq in May? 

The Iowa General Assembly adjourned last week.  For Iowa consumers, the session was a miserable failure.  I would give legislators a big fat F, but enacting a smoking ban was an accomplishment worthy of comment. Exempting casinos from the ban and putting state revenues over the lives and health of casino workers, however, tarnishes even that accomplishment.

The session resulted in major consumer legislation repeatedly being killed by corporate lobbyists.  Iowa remains the only state in the U.S. where consumers do not have the right to sue for deceptive trade practices.  Iowa consumers continue to have little recourse against fly-by-night contractors because the legislature also defeated a bill requiring contractors to post a bond.  Protections provided by the Iowa Consumer Credit Code continued to wither away with inflation as Democrats and Republicans joined forces to side with lenders over the interests of consumers and kill off that legislation as well.  Legislators couldn't even pass a bill increasing the paltry $200 penalty for a landlord stealing a tenant's security deposit.  

Rather than pass meaningful legislation protecting Iowa consumers, the legislature opted for the appearance of doing something when it really was not.  For example, a bill was passed allowing victims of identity theft to "freeze" their credit file.  Federal law already provides for credit file freezes, and any state law inconsistent with the federal statute is preempted and unenforceable.  Rent to own car sales were banned.  I have had at best two clients in five years complaining about rent to own car sales.  While the bill is a plus, I assume it passed because it had little opposition from car dealers or other powerful lobbying groups.    

Thousands of Iowa consumers are suffering from abusive practices and inadequate laws to protect them.  Meanwhile, legislators of both parties are so addicted to special interest campaign funds they are incapable of siding with Iowa consumers over these powerful special interests on any legislation of significance.

As far as protecting Iowa consumers goes, the legislature fiddled while Rome Burned. 

There is legislation pending in Congress to ban or curtail pre-dispute arbitration clauses in consumer credit contracts.  In a CMA Daily News article, Mark Hutchins contends consumer lawyers are disseminating misinformation about arbitration and the National Arbitration Forum.  Hutchins claims  NAF arbitration is a fair, inexpensive option to resolve disputes.  Yeah, right.  And cutting your leg off is a good way to treat an ingrown toenail.

Hutchins' article takes a wrong turn at the outset.  He states, "[f]irst, arbitration does not stack the deck against consumers.  No one wants a system that is unfairly tilted in favor of one type of party over another, and courts reviewing arbitration awards would never allow it."  At the risk of being accused of spewing forth misinformation, OF COURSE creditors want, and have obtained, a system stacked in their favor.  Courts have almost no authority to overturn factual or legal conclusions in an arbitration award, and they rarely do.

Arbitration is NOT less expensive than litigation in court.  Hutchins cites examples of NAF filing fees slightly lower than comparable filing fees in Texas and California, as if these were the only fees charged in arbitration.  It's like arguing a Ford Taurus is about the same as a Mercedes because the  price of an oil change is similar.  What Hutchins leaves out is that NAF then charges for participatory hearings, written rulings, motions, etc.  In court, a consumer does not pay these additional fees.  NAF has set up a system so arbitration IS cheaper if you are a creditor obtaining essentially default arbitration awards, and I'm sure this is a big selling point for NAF when it attends debt buyers' conferences promoting NAF arbitration.  But to try to sell this as something cheaper for consumers to vindicate their rights is simply not true. 

And if arbitration is so cheap and efficient, why am I staring at a file where Wolpoff and Abrahmson sought an NAF arbitration award on an old MBNA account that includes a request for over $6,000 in attorney's fees for legal work consisting of essentially forms prepared by paralegals?  Does anybody at NAF even care that Iowa law prohibits attorney's fees against a consumer in a consumer credit transaction?  Do these out of state attorneys even know anything about Iowa law?  Talk about lawsuit abuse.

Hutchins then argues arbitration is more efficient because creditors do not have to hire attorneys in the states where the consumer resides.  From where I sit, $6,000 in fees for a few computer generated forms does not look all that efficient to me.  But that is hardly the only problem.  If the lawsuit were brought in an Iowa court, out-of-state attorneys would have to associate local counsel or request admission in Iowa under the rules and subject themselves to ethical requirements imposed by the Iowa Supreme Court.  Hutchins thinks it's a good deal arbitration can proceed from Minnesota against an Iowa consumer.  I don't. 

The problem with his argument, is Iowa law requires consumer credit litigation to take place in the county where the consumer resides.  The arbitrators are from Iowa.  The consumer is from Iowa.  Creditors get away without hiring local attorneys because NAF rules simply ignore Iowa law and its protections for consumers.  Rather than being a plus for arbitration, this is simply another example of forum rules biased in favor of creditors.   Consumers receive no benefit from out-of-state arbitrations.  If documents are later needed from the arbitration to contest the award, the consumer is faced with an entity beyond the Iowa court's subpoena power.  In fact, many consumers are confused by a letter sent by regular mail from Minnesota containing an arbitration demand or award, and they do not realize the significance of the letter or that it triggers important deadlines for protecting their rights.

Hutchins and other consumer arbitration advocates try to bolster their claims with statistics.  In the words of Mark Twain, there are three kinds of lies--lies, damn lies and statistics.  Rather than waste time refuting the bogus statistics, I will share one key observation.  Consumer attorneys uniformly oppose NAF arbitration.  Credit card banks nearly all provide for, and support, NAF arbitration. If it is a fair, efficient and cheap way to resolve disputes, why do consumer attorneys all oppose it?  If it is such a good deal for consumers, why do credit card banks and debt buyers support it.  Look at your cardholder agreement and your credit card statement.  Do these suggest to you some deep concern by credit card banks for consumer fairness? 

And here is the rest of the story--a little information about Mark Hutchins from the bio provided with the article.  He worked in management in Asset Acceptance's legal department for more than five years.  Asset Acceptance is a well known debt buyer.  Asset Acceptance is known to me as a debt buyer who has attempted to collect debt that is beyond the statute of limitations.  In other words, the consumer doesn't owe the debt and has good defenses.  There have been allegations that some Asset Acceptance accounts were "re-aged." Re-aging a debt can involve posting payment to an account that was never really made to revive the statute of limitations.  Whether that was done, or who did it, is unknown, but there is no doubt it is a concern.  A common complaint with NAF arbitration is that its arbitrators essentially "rubber stamp" many awards where the creditor has not complied with NAF's own rules, has not followed applicable law, and has issued awards with inadequate proof.  Debt buyers like Asset Acceptance can have real problems proving a case in court, because they frequently lack the documents and witnesses necessary to win if they meet informed opposition.  In Iowa, they frequently do not even have the documents necessary to obtain a default judgment.  It is no wonder NAF arbitration looks like such a great option to them  But does it follow that it's a good deal for consumers?   

Is NAF arbitration biased against consumers?  Forget the statistics.  If it looks like a duck, walks like a duck and quacks like a duck--it's probably a duck.     

Sometimes it's a little difficult to find something to do in Des Moines.  Last night was an exception.  I went to a Bon Jovi concert at Wells Fargo Arena.  Normally I leave a concert with my ears ringing because of the loud music.  I left the two Bon Jovi concerts I went to at Wells Fargo with my ears ringing because of the crowd noise.  Nobody leaves disappointed.

When Bon Jovi says the only reason he comes to Des Moines is to hear the crowd scream, you tend to believe him.  The band definitely receives a warm welcome here.  The music's great and they really put on a show.  

The Bon Jovi song "Have a Nice Day" reminds me of complaints my clients make against abusive debt collectors.  After a host of illegal threats to do God only knows what, the collector ends the conversation with "have a nice day," knowing full well he has intentionally done everything he possible can to intimidate, coerce, cause stress and ruin the person's day.  Life is too short to allow some idiot breaking the law to purposely ruin even one of your days on earth.  

Debt collection abuse should not be tolerated.  Respond with a no contact letter, an unfair debt collection lawsuit and, oh yes ... be sure to tell the abusive collector to "have a nice day."   

Here is a link to Have a Nice Day by Bon Jovi.

"If the world gets in my face, I say ... have a nice day."

http://www.youtube.com/watch?v=UheKmPY1mNw&feature=related

Once upon a time, contracts were formed with full disclosure of terms and a mutual agreement signed by the parties.  We then evolved to signed documents with the unfavorable terms buried in fine print so you, the consumer, wouldn't notice.  Now credit card banks and cell phone providers frequently hide even the fine print.  They just send you something that looks like junk mail, and if you use the card or the cell phone after that, you have "agreed" to a new contract with God only knows what for terms. 

Gateway took this a step further, sending the contract terms in the box with your new computer.  If you didn't kick your kids off the computer, unhook it and send it back, you agreed to the contract terms you later found stuffed in the box.

Think about how this all works.  Your cellular service provider sends you junk mail with new, unfavorable contract terms.  Then, your 13 year old text messages in her vote for American Idol and, presto ... you have a new cell phone contract.

As consumers, we have pretty much accepted the fact corporations dictate the terms of all agreements.  We just pay the bills.  A few brave souls with a high tolerance for torture will occasionally venture into phone tree hell seeking out  a customer service rep in India to lodge a complaint.  Most of us have far less tolerance for pain and suffering.  We just accept our plight and pay whatever is demanded, paying our fair share of some corporate executive's golden parachute.

Over the years, I have taken great pleasure in assisting a few gutsy consumers in turning the tables on contract formation abuse.  They responded to junk mail contract formation offers with their own counter-offers.  (Yes, it is possible for a consumer having the audacity to attempt contract negotiation to avoid prison--it is not illegal).  It goes something like this:

The consumer receives a junk mail contract modification notice: use your credit card again and you now have a contract with our brand spanking new higher interest rates, a really bad arbitration clause, and a lot of other unfavorable terms the lawyers in our legal department worked overtime to write, and are quite proud of.  These changes will make our shareholders millions of dollars.

The consumer's counter-offer: I reject your offer but if you, Mr. Credit Card Bank, cash this check you now have a contract with me that is more to my liking and incorporates the enclosed consumer friendly terms. 

You will generally find that credit card banks cash checks just as freely as your 13 year old text messages. Does it work?  Sometimes.  It depends on the situation and the contract being modified. 

But you should hear them squeal when it does.  It really is a thing of beauty.  You would think the consumer committed some form of grand theft auto.  The audacity of a consumer actually negotiating a contract.  And contract formation by mail with no signed written agreement?  Who ever heard of something so absurd?  How can we, Big Credit Card Bank, be expected to read and respond to our mail?  Unlike the consumers we dupe who undoubtedly all have a staff of lawyers at home to scour, read and interpret the legalese and fine print in the junk mail contracts we send out, our vast corporate legal departments are far too busy with take-overs, drafting all that fine print in our own one-sided contracts and the like to deal with consumers wanting to negotiate contracts.  We are busy; have things to do; can't be bothered; no fair; waa, waa, waa ...  

Which reminds me of an old saying.  What's good for the goose, is good for the gander.

Dateline NBC with Chris Hanson did a story last night on insurance agents misleading the elderly during the sale of equity indexed annuities.  Undercover cameras caught insurance agents failing to disclose there were severe penalties for early withdrawal of funds.  Consumers were losing a substantial percentage of their investments while the perpetrators received thousands of dollars in commissions.  

At least in other sates, elderly consumers have the right to sue to recover their losses. Defrauded Iowan aren't so lucky. AARP has worked to change that, but not enough legislators in Iowa are getting the message.

Another legislative session is winding to a close.  Once again, the Iowa House killed off consumer rights legislation that would have allowed Iowa to join the other 49 states giving consumers the right to bring actions against merchants of fraud and deception. 

Apparently a half dozen Democrats refused to support the legislation and Republican support was pretty much non-existent.  One would think the fact the country is entering a recession caused by deceptive sales and lending practices might have spurred action--but it didn't. 

This all brings a little AC/DC to mind--"C'mon, C'mon, listen to the money talk."

In the Iowa Legislature, out-of-state campaign money still talks louder than the needs of Iowa consumers. 

I have always enjoyed watching a young person have fun and be successful.  Over the years I have coached youth baseball  and junior high mock trial. 

I also enjoy music.  So it is no surprise I was immediately impressed when I stumbled onto this web site of one very talented 11 year old South Korean boy, Sungha Jung.  It is definitely worth visiting.

http://www.youtube.com/user/jwcfree

San Francisco has sued the National Arbitration Forum alleging it's biased against consumers.  Ya think? 

NAF and its arbitrators are paid handsomely by credit card banks and debt buyers in the quest to obtain arbitration awards against consumers--awards federal courts have made extremely difficult to overturn.  Call me stupid, but I fail to see how any system can be viewed as unbiased where the decision maker's future income depends on how his decisions come out.  Any arbitrator or arbitration forum who rules against credit card banks and debt buyers has placed future arbitration income at risk. 

This concern is not just speculation.  JAMS is an arbitration forum that tried to implement rules making arbitration fairer for consumers.  Businesses objected and took JAMS out of their arbitration agreements.  JAMS relented and caved to these business interests.  An NAF arbitrator who had previously ruled in a creditors favor on almost every arbitration made the mistake of ruling in a consumer's favor on one arbitration.  The creditor dismissed the remaining arbitrations pending before that arbitrator and sought and obtained a different arbitrator.    

Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform, has been critical of the San Francisco lawsuit.  The blatant, well documented lawsuit abuse against consumers that stems from mandatory arbitration obviously is not a topic for "legal reform" at the Chamber.  In my opinion, if the U.S. Chamber is opposed to something, you can pretty well assume it's good for consumers. 

NAF is quoted as saying it is a neutral forum and its standards satisfy or exceed objective standards of fairness.  It has been my experience that NAF has enforced rules against consumers seeking arbitration awards that have been ignored by NAF for debt buyers seeking awards.  NAF has accepted cases for arbitration from debt buyers without the documents required under its own rules to initiate an arbitration.  Iowa laws protecting consumers in credit transactions are routinely ignored by NAF arbitrators.  As far as I am concerned, money talks and I have seen nothing at NAF that leads me to believe otherwise.  After all, we are talking about an arbitration forum that marketed its services to businesses as something akin to civil justice reform, and that has filed amicus briefs in court in support of positions taken by businesses in litigation. 

The San Francisco complaint alleges one NAF arbitrator ruled in favor of consumers 30 times--out of 18,075 cases.  Bud Hibbs refers to another NAF arbitrator as "the rubber stamp champ" for ruling in favor of businesses 332 times and consumers 0 during six days of arbitrations.  The amount allegedly requested by the businesses was $3,432,919 and they were awarded $3,432,259.  My congratulations to the consumer who successfully dinged the creditor $660--she should get an award or something.

We have two NAF arbitrators in Iowa who have also cranked out NAF arbitration awards for creditors.  It's amazing how these carefully contemplated rulings by these unbiased decision makers are nearly identical in form and content other than the amounts awarded.  The forms for ruling in favor of the creditor wouldn't be supplied by NAF to the arbitrators would they?

State and federal courts are routinely concerned about any appearance of impropriety because it erodes the public trust in the court system.  I have long since given up on removing the appearance of impropriety from mandatory arbitration.  I would just like to see the actual impropriety removed. 

My son and I enjoy fishing on Gull Lake near Brainard, Minnesota.  One gorgeous summer day we were kicking back with a beer, relaxing and enjoying the scenery--probably arguing about who caught the biggest or most fish during the trip--when one of us spotted a bald eagle perched high near the top of a tall tree next to the lake.  While we were watching, the eagle spread its wings, gracefully glided toward the lake's surface, effortlessly snatching a fish from the water, and just as gracefully flew away--all as if to demonstrate to us what a couple of losers we were in our boat with our depth gage, fancy fishing equipment and no fish.

You are probably wondering what this has to do with consumer law.  Absolutely nothing.  I just enjoy the outdoors and like to get away from it all once in a while.  I would encourage you to do the same--especially after one of those weeks where you feel less like the eagle and more like the fish. 

*Title From Rocky Mountain High by Jon Denver.

When it comes to illegal discrimination, most people think of discrimination in housing or employment.  Credit discrimination is also prohibited.  The Equal Credit Opportunity Act prohibits credit decisions based on race, sex, age, religion, national origin or the receipt of public assistance.   The Iowa Consumer Credit Code also prohibits discrimination against consumers who exercise their rights under the Credit Code.  Credit discrimination is prohibited in every aspect of a credit decision.  That includes not only denials of credit, but also extensions of credit on less favorable terms.

Married women frequently are the victims of credit discrimination by creditors who require the woman's husband to co-sign for a loan a man with a similar credit application would have received without a co-signor.  Women dealing with a lender requiring a co-signor are legally entitled to the reason why their application was denied on its own merits.  

African and Mexican Americans are often charged interest rates higher than others with comparable credit histories.  Many consumers caught up in the sub-prime mortgage crisis were actually victims of credit discrimination, having been placed in sub-prime loans even though their income and credit scores would have supported a more conventional loan.  

And nobody should say I never have anything good to say about credit card banks.  It is my opinion that most credit card banks generally just soak everyone they can, as often as they can, with as high an interest rate as they can get--all in a non-discriminatory manner.  So I'm sure we all applaud their equal opportunity, non discriminatory lending practices.    

The Federal Trade Commission's web site has additional information on credit discrimination.  There is a link to the site on the Resource page of my web site. 

Maybe if you ignore your debt problems, they will just go away.  Maybe you will win the lottery. Maybe you will strike oil in the back yard or money will start growing on trees.  Most clients who contact me with debt issues have one thing in common.  They rarely have a workable plan to deal with their debt.  Some have consulted with debt reduction companies or unscrupulous credit counseling organizations and have a plan but, quite frankly, their plan sucks.  They would be better off without one.  

Here are just a few mistakes consumers make:

    1.  Refinancing a house to pay credit card debt.  While there are some limited exceptions, in most cases credit card debt should not be rolled into a home loan.  In Iowa, you should not lose your home for credit card debt.  If the debt is rolled into a home loan and you do not make your house payments, you are definitely at risk of losing your home.  

    2.  Making payments on credit cards while the house payment becomes delinquent.  Once again, you cannot lose your home for failing to pay on a credit card.  You most certainly can by not making your house payment.

    3.  Filing bankruptcy when there is no reason to file.  Many individuals on social security or social security disability have no reason to file bankruptcy because they have only exempt sources of income creditors cannot legally take, their credit is already trashed, and they have no need for future credit.  Bankruptcy is just an unnecessary expense.

    4.  Paying on the wrong credit cards, or paying the full balance when the balance could be negotiated down.  There is an epidemic of debt scavengers attempting to collect credit card debt beyond the statute of limitations.  Why pay 30% interest on a credit card account purchased by a debt scavenger for pennies on the dollar when the account cannot be collected?

     5.  Letting abusive debt collectors determine the family budget.  Many times, the most abusive debt collectors are collecting debts that should be very low priorities or that should not be paid at all, either because the debt is time-barred or the consumer has valid unfair debt collection claims that could be used to reduce or eliminate the balance on the credit card.

    6.  Ignoring arbitration notices or lawsuits until it is too late to do much about it.  Consumers with good defenses to credit card debts routinely ignore notices of arbitrations or lawsuits until they are faced with an asset freeze or wage garnishment.  Many of these consumers will have wages garnished for years to come on debts they had valid defenses to if they would have only sought competent help.

If you have debt issues, start a file for each account and save everything.  Document all calls.  Do not provide financial information debt collectors will use against you later to garnish your wages or freeze your bank accounts.  Get experienced help and get a workable plan.  If you are being harassed by debt collectors, help means an experienced unfair debt collection attorney.  Visit the resource page on my web site for additional information on debt issues and for the link to the National Association of Consumer Advocates' web site. 

When you think of lawsuit abuse, what do you think of?  I'll bet if most people were to list three or four cases of so-called lawsuit abuse, all of the cases would involve an individual suing a business.  But by far, the greatest number of abusive lawsuits are threatened or filed against consumers. 

There are many court rulings documenting these abuses, but they hardly receive attention.  The reason is consumers do not have the resources of business organizations to organize media campaigns to call attention to these outrageous cases.

Here is just one of a countless number of examples.  A credit card bank is attempting to collect more than $20,000 from a consumer.  The creditor has certificates of deposit frozen at a bank.  That's not unusual.  It is the typical credit card debt--outrageous fees and interest have exploded the debt far beyond anything actually charged on the card.  But that's not the outrageous part.  I hear the exploding credit card story on a weekly basis and am getting used to that.  What's outrageous in this case is the creditor is attempting to collect the entire amount from the consumer's 81 year old widowed mother.  The widow had nothing whatsoever to do with this credit card.  Her mistake was to start, but not finish, the process of putting her son's name on CD's owned by her and her husband after her husband died two years ago.  She thought if she became disabled, somebody could pay her bills.    

But times are tough for credit card banks.  I suppose they need the money more than an 81 year old widow.   

A story in the New Jersey Star Ledger reports credit card companies are now raising interest rates for consumers who are late on only one payment, take out another credit card, or who make a large purchase on an unrelated card.  One consumer reports being one day late on a payment with Chase and having his interest rate explode from 7.99 percent to 29.94 percent, raising his minimum payment from $300 to $700.  Another credit card bank charges late fees if payments are not received before 2:00 p.m. on the due date. 

I assume the only remaining step is a clause in the cardholder agreement allowing the credit card bank to hold you up by your heels once a month and shake the change out of your pockets.  

The Star Ledger story goes on to quote John Hall, a spokesman for the American Banker's Association, as saying "[i]f you become a riskier customer, the only thing the card companies can do is raise your rates or lower your credit limit."  With all due respect to Mr. Hall--what a bunch of B.S. This isn't about credit risk.  This is about greed and the "how can we mislead you now" attitude of credit card banks. 

I would assume if Chase or another credit card bank unexpectedly raises a consumer's interest rate from 8% to 30% retroactively, that consumer is going to become somewhat more of a credit risk not only to Chase, but to other creditors as well.  But that doesn't change the fact that Chase caused the problem in the first place.  I had a client forced into bankruptcy for no reason other than she missed a payment on one credit card, and a completely different credit card bank defaulted her and declared her entire balance due and payable because of the missed payment on the unrelated card.

What's happening with credit card debt in this country is a national disgrace.  It is allowed to continue because consumers suffer silently.  There is little public debate because consumers don't particularly care to discuss with their friends and neighbors how maxed out their credit cards are.  In fact, many don't care to discuss it with their spouse.  Politicians in both parties are addicted to special interest campaign money.  As a result, they lack the political will or courage to make needed reforms. 
 
If you wold like to get an idea of just how serious this problem is, go to Iowa Courts Online and type in the names of a few credit card banks or Iowa debt collection lawyers.  You will soon get a feel for the number of debt collection lawsuits being filed in Iowa.  Keep in mind that many of these lawsuits are being filed on time barred debt purchased by debt buyers for pennies on the dollar, but that has accumulated interest at outrageous compound default interest rates for several years.  A consumer who has no attorney (just about all consumers) and who defaults on that lawsuit (just about all consumers), faces asset freezes or wage garnishments for years to come.  The Iowa legislature should end this practice by enacting a 2 year statute of limitations on open accounts.

Eventually I will get to a blog on the practice of letting credit card banks hawk low limit credit cards to cash strapped students at Hawkeye football games, but when you see those 19 year old standing in line for those "free" t-shirts, you can rest assured that a substantial number of them will leave college with serious financial problems from credit card debt. 

On AOL it was reported 20,000 workers at Nike's factory in Vietnam went on strike seeking a 20% pay raise. 

I'm sure Nike wonders where these greedy women get off demanding a 20% pay increase.  After all, the AOL report claimed Nike pays them a whopping $59 a MONTH.  A 20% raise would take these demanding human beings clear up to $70.80 a month.  With raises like that, next thing you know these women will be able to purchase a pair of Nike shoes for less than a month's work.

C'mon Nike--Just Do It.  Pay the measly 20% pay increase.