This is a story about exploitation of the working poor. By their employer, their union, a credit card issuing bank, and a collection agency.
It began with a notice posted on the company bulletin board-- or more specifically, the union bulletin board-- in a ConAgra owned seafood plant in Florida. The notice was for a Union Plus credit card. The card was issued by Orchard Bank, a division of Household Bank, notorious for its sub prime lending practices. In December, 2003, checks totaling approximately $21 million were mailed to over 10,000 Washington customers of Household who were eligible for restitution under a class action settlement that included every other state and the District of Columbia. www.atg.wa.gov/householdfinance/
This Union Plus card was a "secured" credit card, which would supposedly give those with bad credit or no credit an opportunity to rebuild their credit. There was an 800 number to call for information. So I called, and was told all you had to do was send the bank your money-- from $250 up to $5,000-- and the bank would then send you a credit card with a credit limit for the amount you sent them.
Now, I haven't used credit since 1997, and I tear up all credit card offers and file 'em in the trash, but I believed in my union, and trusted what they offered the members, so I fell for this one. According to court records, so did some of my fellow workers, who also have judgements against them by the same collection agency.
So I sent in my $250--yes I do have paper statements of this deposit-- and a plastic card was sent to me with the union plus logo, which I eventually used to charge items, up to the $250 max.
I also made payments on the card, most of them above the minimum required, and I do have statements documenting these payments. I thought I was well on my way to building good credit, with the help of my union employer. Well, I thought wrong.
Unfortunately, the card issuer was not going to make it quite that easy. My mailed statements arrived late more than once, leaving me without ample time to get my payments to them on time, and when I did mail my payments on time they got posted late, and the bank hit me with late fees. The late fees put me over the $250 credit limit, so the bank hit me with over the limit fees. I began to understand that this secured credit card was never going to help me rebuild my credit. Instead, like a vampire, this bank was going to drain my blood for the rest of my life, if I allowed it.
The brochure, which I still have, states: "With the Union Plus Secured Card, there's no long term obligation. Just give us a call to close your savings account, anytime. Your card balance will be subtracted prior to refunding your money, plus interest. Both your savings and credit card accounts will be closed."
I called and canceled the card. My credit report reflects that the account was closed in June, 2001. No part of my savings deposit was ever returned to me.
In December 2005, more than four years after the last activity on this card, Asset Acceptance, a collection agency, decided to sue me for an amount of some $800. Plus interest. So where's my interest-- on my $250 deposited with Orchard/Household Bank in 2000?
In essence, Asset Acceptance is charging me over $1,300 for using up to $250 of my own money. Can you say usury? How is this legal?
To answer their summons I went to court and filed a motion to vacate the judgement because:
1. I did not owe that amount on this account, as I'd never charged more than $250, (my credit limit) and had made payments totaling at least $172.oo, that I can verify; and
2. The statute of limitations was exceeded on this debt and therefore Asset Acceptance has no legal right to collect on it. I also filed complaints with the Federal Trade Commission. www.ftc.gov
Some of you out there might be interested to read what others have posted on ripoff.com about Asset Acceptance and Household Bank.
I know I was. Here's the link: www.ripoffreport.com
The first judge granted my motion to set aside the judgement. Next, the case was referred to mediation. On March 16, 2006, I attended mediation at the county courthouse, and I told the mediator, and the Asset Acceptance lawyer who gave his name as Steele, the same thing again: This debt was past the statute of limitations, and the debt wasn't valid. Asset Acceptance never produced any proof of when they bought this debt, or any verification whatsoever. Asset Acceptance first served me with a summons when the debt was past the statute of limitations in Florida. Re-aging debts is illegal. They continued to send me harassing letters even after I'd written to them, certified mail, and told them to stop communicating with me.
My $250 deposit for this secured credit card has never been returned to me, in whole or in part, and I owe them nothing, but the bank that still holds my original deposit--Orchard, Household, whatever--owes me something. That was my $250 I handed over to their bank in 1999, and I want it back--plus interest!
When I got suckered into this, I was working as a laborer in this Conagra owned factory, and a low wage one at that, so I sent them my $250 in good faith, believing I'd build "good credit." Instead all that was "built" was bad will, and bad faith. Unions should think twice about associating their names with scams like this. If all working folks were paid a living wage, nobody would need credit, would they? And that's a whole other blog post!
Today, the court sent me a default final judgement because I "failed to appear at pre-trial on 3-16-06." Now I'm not sure if "pre-trial" is a synonym for mediation, but I was present at mediation on that day, 3-16-06 with the court appointed mediator and Mr. Steele, the Asset Acceptance lawyer. And it puzzles me why this final judgement was awarded, because "defendant failed to appear at Pre-Trial on 3-16-06"-- because I did appear on that date.
It appears that some kind of deal was made without my knowledge between Asset Acceptance and the judge who signed the default judgement. I was given no opportunity to present my evidence to this judge that the debt is invalid, and Asset Acceptance never produced any proof they purchased this debt or of its validity. It's kind of like being convicted in absentia. Railroaded.
I noticed that this judge's name is different from the judge on the original complaint. Looks like Asset Acceptance managed a judicial switcheroo. Or something.
Why would Asset Acceptance go to this much trouble to collect a debt that amounted to maybe $100--which was secured by my deposit, anyway--from a working stiff who never earned over $16, 000, and who is currently unemployed with some serious health problems.
Why, you ask, did they decide to come after such slim pickings in late 2005, (past the statute of limitations) just a few months after I sucessfully appealed a lower court decision in the case Cris D'Angelo v Conagra Foods? That is a subject for another blog post.
I post this story to warn you working stiffs out there. Don't accept their phoney credit card offers, whether secured or not secured. It's not good credit you'll get, but indentured servitude. There is a reason somebody coined the term "predatory lenders." It's because there are organizations that make their profits by preying on the poor, the vulnerable, and the financially desperate. They will use your sincere desire to better your lives and turn it against you.
Stay away from the wolves-- even if they come dressed in union clothing.
And remember little lambs; you don't need no stinkin' credit. All you need to do is: "Work and pray, live on hay; you'll get pie in the sky when you die. That's a lie." -- lyrics by Joe Hill.
One more thing: all you legal eagles, attorneys, and crusaders for justice out there. If you're interested in initiating a class action lawsuit against predatory lenders, and collection agencies, and you would like to get my information to add to it, contact me via e-mail. Any and all proceeds that I might be awarded from such a suit, I will donate to a grassroots organization that effectively advocates for and helps working folks. And that's no lie.