Credit card insiders tell of deceptive practices
NEW YORK (Reuters) - Two former employees of credit card issuer MBNA, now owned by Bank of America, said on Wednesday they were forced to use aggressive and deceptive practices with customers in order to boost revenues.
Cate Colombo, from Maine, said she signed up for a customer service job but was instead instructed to make insistent sales pitches aimed at getting MBNA customers deeper into debt.
[...]Consumer indebtedness is a major problem in the United States, one that is becoming worse amid a financial crisis that threatens the economy with a recession. Americans had $969.9 million in outstanding credit card debt as of July, according to Federal Reserve data.
[...]Colombo said in one instance she was disciplined for not being aggressive enough in “pushing product” to a 90-year-old man who could barely hear over the phone.
Jerry Young, another MBNA rep, said he was asked to intensely target customers in such a way as to leave them little choice but to stretch their finances, to the company’s profit.
Travis Plunkett, legislative director for the Consumer Federation of America, said the behavior continues at Bank of America but current employees are too frightened to speak out on the record.
[...]Colombo said another tactic employed by MBNA was to hide the existence of the Soldiers and Sailors Act, which gives spouses of troops on active military duty the right to a lower interest rate.
“We were not allowed to offer that information to them,” the former service representative said.
I hope that this article is merely poor reporting. However, I can’t help but suspect that it is a calculated attempt to capitalize on the public’s ignorance to drive revenue generating hits within the website. How ironic is it that CNN would prey on the same ignorance to make a profit that it is so willing to deride MBNA for?
The quotation of these two individuals as reliable sources is both absurd and embarassing. For example, Colombo states in the article, “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.” Common sense should indicate that this is a ridiculous assertion. However, if common sense is not available, a simple check of publicly available information proves as much. MBNA’s 2004 10-K filing with the SEC indicates that it employed “approximately 2,300 people in telesales.”
If each of its 2,300 telesales workers made the company $4 million a month, or $48 million a year, no one would be happier than MBNA and its shareholders. And few would be surprised by CNN’s “revelations”, which are indeed sensational. Why not? Because at the rate of profit CNN’s sources report, MBNA’s profits would be $110.4 billion, or nearly 3 times Exxon’s record $40.6 billion profit in 2007.
While social responsibility was likely of little to no concern for MBNA, CNN should be embarrassed to be posting articles that create the appearance it is looking out for the good of the masses. At best, this article masquerades customer service representatives as “bankers” to create highly biased reporting. At worst, it uses sources it knows to be poor to engage in deception for the goal of profit. If that is the case, the argument could be made that it is no more, and perhaps less of, a respectable company that MBNA.
These ladies that are speaking about Bank of America and pushing to sell and make their customers run up such a high debt in order to make so much money, I happen to be one of those customers.
I can barely afford to go to school, to pay for my car, and to pay off my debt. And what is keeping me from being able to live more freely is my Credit Card. What happened was, every time I would get close to my credit limit they would raise it by a few thousand. Of course I have bills and emergencies that crop up out of nowhere. I would use it for those specific purposes. One time I was a day late and POOF! My interest rate went up to 28%. Trying to argue it back down has led me know where. Besides even more in debt. I am young. I have emergancies that need to be paid. I am waking up every morning now sick to my stomach because I have no way to pay off that card. Yes I should have been more careful. But trying to go to school full time and working full time, I have to have some extra cash for groceries. I think that is so unfair. Especially to a girl living life on her own, trying to do good, and doing it all on her own, especially while the people on the other end of the line are making sooooo much more money. That really isn’t fair. At all. And when they go to bed at night, I hope they feel sick to their stomachs like I do when I wake up and try to figure out how I will pay my bills before I can even think about buying food. 
Thank you!