December 4, 2009

I just got propositioned over the phone by Discover Card; I think I need to shower and get the slime off.

When my phone rang and I saw that Discover Card was calling, I reluctantly decided to answer it as I do have that card and maybe, just maybe this might be important. Instead of a live human being, a woman’s recorded voice greeted me this way: “Hi, I’m from Discover and I’m excited to talk with you. Call me back at ……..” Now read that again, but imagine a slightly sultry voice, not perky and upbeat, but more slowly and somewhat suggestive in tone.  She’s excited? Phone sex from Discover? Another member perk, perhaps?

Like everyone, I’ve had my issues with credit card companies. Like Chase, for example, who arbitrarily doubled my APR and felt pretty good about it when I called to complain. Discover is another. They use two-cycle billing, a hostile, unethical practice that severely penalizes those who carry a balance and are well-known for jacking up APRs to over 20% for one late payment and holding it there for at least six months. Yes, I had that happen to me. Scofflaw that I am, I missed a payment date a year or so ago and up the APR went to around 25%.

Complaining, of course, was futile. Great payment history, credit score over 700, all irrelevant. So into the drawer went the card. A funny thing happened soon. I started to receive offers from Discover Card to transfer balances from other cards to them, a strategy, they said, which could save me hundreds, maybe thousands in interest! Keep in mind that my rate was now 25%.

So I called Discover Card and asked if they understood how ludicrous this was. I asked if my rate was still 25%. It was. And you want me to transfer other card balances to you and pay 25% on them? Yes. My other cards have APRs of 8 and 5.5 %, but I should transfer them to Discover at 25%?  Sure. This was turning into a basic intelligence test. They failed.

So back to my sexy phone call. All credit card companies have horror stories and Discover is one of the most pernicious of them all. They treat long-time customers with contempt and then telemarket them with sultry come-ons. No pulse racing here, just a mix of mild amusement and outright disgust. Consumer culture allows the American population to be jerked around by credit card companies, and it will continue until the enabling ends.

October 1, 2009

Under the category of “you can fool all of the people some of the time, some of the people all of the time, but not all the people all of the time,” I am amazed at the chutzpah shown by some businesses. No, I’m not talking about any of the big Wall Street scandals, just a small chain of retail computer stores here in Salt Lake City. A very, very successful chain, and one that fools some of the people, or at least enough of the people, some of the time.

This computer store sells laptops and desktops with a lifetime service warranty which initially sounds like a nice, value-added service. The owner does all his own TV and radio commercials looking and sounding slightly insane. Loud, crazy stuff. I think every city has someone like this. His tag line is always “(name of company)…where we love you!!!”

Every spot belittles other computer companies for trying to sell extended service warranties for what are lousy computers to begin with. The owner accuses other computers of being made with inferior parts and when you have a warranty issue they send your computer to “Chumba Wumba” for repairs. He really hammers on the immoral, over-priced extended warranties, since his machines come with a lifetime warranty included in the price. Are you suspecting anything yet?

This is where it we depart from reality. His laptop computers, last I checked, started at around $1800 for a real minimal machine, and up to three grand for a decent performer. Equivalent PCs from major manufacturers start at around $600 and prices keep dropping. If I buy say, a Dell or HP for $800 and buy an extended warranty for another $2-300, I’m still paying less than this guy’s machines with a “free” warranty. It’s so plain, isn’t it? Those “free lifetime service warranties” are built into the retail price, meaning they are not free at all. They cost the consumer a bundle. As for it being “lifetime,” most people trade up after a few years anyway because of new technology. And while the service may be free, those new parts can cost plenty, if they’re even available after three or four years. As a personal example, I bought an Acer laptop on sale for $600 two years ago. I did not buy an extended warranty and I’ve taken it in for repairs three times for total of about $250, plus a memory upgrade. I’ve still spent far less than the cheapest computer at these stores.

This is transparent fraud, but it’s out in the open for all to see. Yet a lot of people don’t and have made this owner a millionaire. I’m all for free enterprise and a proud capitalist, but there are ethical lines we need to maintain. Just because you can fool some of the people some the time does not mean you should. Others might say buyer beware, it’s clever advertising and there’s no law against that. Maybe not, but we shouldn’t need laws to tell us the right thing to do in business.