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BEN'S MAILBAG: Credit Card Companies Forcing Arbitration Down Our Throats! - plus - Should I Hire A Credit Repair Company? - plus - Go Tell AT&T: Stick These Phone Rental Charges!!! Air date: Thursday, March 14, 2002
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Question #1
My mother-in-law received a letter from her credit card company that says there's a new provision that will require any disputes be settled by binding arbitration rather than by a court. Can she reject this if she wants to?
-- Barry
Answer:
Aren't we getting suspicious (and cynical) in our old age??? And you're correct, of course: These arbitration clauses (which started surfacing about 18 months ago but really seemed to have picked up steam the last 4-6 months) are-without question-in the best interest of the credit card companies. But don't just point the finger at the credit card industry:
Many long distance providers, brokerage firms and even health insurance companies have started quietly slipping these clauses into their agreements as well.
And the bad news? It's going to be just about impossible for any of us to do any business with these industries (and others, I'm afraid) unless we're willing to accept these onerous agreements. Unless you're a Capitol One credit cardholder, that is. Capitol One's allowing existing cardholders to opt out of their new arbitration agreement...but won't issue new cards to anyone that doesn't want to play by the new rules. What can the rest of us do about this?
* Put pressure on our lawmakers to outlaw these one-sided agreements, especially those jammed down the throats of pre-existing customers.
* Refuse to do business with companies that are willing to change the rules of the game once it's started.
* And if you've got a balance with a company that's implemented these amendments to your agreement? Pay off the balance and close your account. Yet one more reminder that we always speak the loudest through our pocketbooks!
Question #2
A friend of mine heard of a company that removes all your past bad credit by using a loophole; if you didn't receive notification by certified mail about each bad credit, then it will be removed...they charge $309. Is this legit?
--DMY
Answer:
No...it's a scam. Tell your friend that they need to spend their money trying to work out settlements with companies that include removing potentially-negative information instead of patronizing credit repair companies. The Federal Trade Commission and the Texas Attorney General's office aren't fans of credit repair companies, either. I've got more information on my website:
www.bendover.com/repairs.asp
Question #3
My Mom has been paying quarterly rental fees for who-knows-how-many-years to lease a "Trimline" and a traditional phone...I urge all of your older consumers to double-check their phone bills!
--Scott in Fort Worth
Answer:
I suspect these rental fees are left over from the "old days" of AT&T, when all of us actually were renting our telephone equipment. But how long has this been out of practice? And the bigger question is begging to be asked: How many consumers are still unwittingly paying unnecessary phone rental fees?
If you still have original AT&T-issued telephone equipment and owe a "legitimate" monthly or quarterly rental fee, I'm hoping this column will put an immediate stop to this silliness. The quarterly $19.35 fee Scott's Mom was paying for renting a Trimline phone borders on theft in my book. A quick browse of Radio Shack's website turned up at least a half-dozen similar phones ranging in price from $9.95 - $19.95...to
purchase! She was spending $143.92 per year for the privilege of renting two phones that she clearly could have bought many times over. And that's just one year's worth of fees.
I'm hoping that the wave of ticked off consumers this column is about to trigger will cause AT&T to issue mass refunds or credits on future service. It's wrong and it's up to each one of you to put a stop to it immediately. If you're one of the unfortunate many that's still renting your equipment, may I suggest you call the phone company that's charging you and tell them to come pick up the rental phone(s) and to stop billing your account for this old equipment. I doubt they'd want to retrieve your old phone(s); here's a reasonable solution that I'd pitch if I were facing this situation and preparing to call the phone company:
#1 Quit billing me
#2 Give me the phones I currently have in my possession.
#3 Give me a credit on my account for any phone rental charges billed over the last 5 years.
One final word to the phone-wise:
If they agree to these terms, do not sign anything waiving your rights to sue them over this matter.
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