Many consumers think that by having a pleasant conversation with a bill collector on the telephone, and disclosing the nature of their financial problem, that the bank will somehow be sympathetic to their situation. Wrong! If you’re having trouble making payments on your debts, it’simportant that you understand one thing:
THE BANK IS NOT ON YOUR SIDE!
They want their money, and that’s all there is to it. The bank that holds your account doesn’t care how the debt got there. They only want your minimum monthly payment, period.
- It doesn’t matter that you (or your spouse) lost your job and couldn’t find another one for six months.
- It doesn’t matter that you were sick or seriously injured and had medical bills that put the whammy on your finances.
- It doesn’t matter that you’re drowning in debt as the result of a difficult divorce or separation.
As far as the bank is concerned, you signed an agreement, and unless you pay your bill on time, they intend to make your life very unpleasant. Once you start to fall behind, they lower the boom, and the dreaded collection process begins. It starts with polite phone calls and letters (“Did you forget to send us your payment?”) and rapidly escalates to daily harassment, nasty letters, and abusive tactics.
Collection activity is designed to pressure you to find money someplace and send it in NOW. Once you fall behind, the bank becomes your adversary, not your friend. Here’s one small sample of ruthless credit tactics: Get out a copy of your credit card agreement with a bank—any bank, since they all do this—and look carefully at the fine print. You’ll find, if you look hard enough with a magnifying glass, that there is a nasty clause that informs you of the following: “Interest rates will be substantially increased in the event that debtor defaults on monthly payment agreement.”
That’s right. The banks kick you while you’re down! Just when you most need them to LOWER the interest rate, so you can dig yourself out of trouble faster, they start charging a HIGHER interest rate. In our opinion, this should be illegal, but unfortunately it’s not. We’ve seen rates jump from an already ridiculous 20% up to 27% when a debt goes
delinquent. In the good old days, people went to jail for charging that kind of interest. But today, they just become bank presidents.