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Baltimore City's reverse redlining lawsuit dismissed.
Baltimore Sun confuses the public by trying to define probation before judgment.
Court of Appeals considers whether an arbitration agreement is binding.
How Dixon maintains her innocence by making an Alford Plea.
Lessons from the Redskins suing their fans.
Local print media confuses National Media with their headline regarding Suggs? Protective Order
McNair's death reminds us that everyone needs a Will.
Mega banks take notice: raise consumers interest rate and don?t expect to be paid.
Redskins sue their fans.
Suggs consenting to Protective Order was a wise move.
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Mega banks take notice: raise consumers interest rate and don’t expect to be paid.
This is not the average story of a credit card company raising interest rate, thus raising the minimum payment, and the consumer defaulting because they cannot afford the new payment. Rather, this is a story of a California lawyer purposely refusing to pay Bank of America.
Ben Pavone has a Bank of America credit card with a substantial balance, approximately $30,000. Because Pavone use the credit provided by Bank of America, they lowered his available credit and raised his interest rate to 27.99%. Instead of conceding, Pavone stopped paying his bill. He also mailed a letter to Bank of America stating that the giant mega bank was in breach of contract and he would not resume paying until they return his credit limit to the original amount and lower his interest rate to 10.99%. If Bank of America refuses, he will file a lawsuit.
Unfortunately, Pavone’s story is common to all socioeconomic classes. Banks that have received Obama’s stimulus money have turned their backs on the poor, middle class, and rich Americans alike. Now it is questionable if the banks are in fact in breach of contract. For fun, read one of your credit card agreements, which are so one-sided, these banks can do whatever they want under these agreements.
But the credit card agreements may not save the mega banks. Banks that raise interest rates and lower credit limits because consumers use the credit these companies provide could face costly litigation for tortuous violations. Specifically, the mega banks may be found liable for unconscionable and deceptive trade practices.
The problem is that a consumer with decent (600+) credit rating to excellent credit rating cannot afford to destroy their credit out of principal. The mega banks know that and plan to play the odds that “good” consumers will pay their bill. Furthermore, the same way that mega banks will lose money to defend these lawsuits, the consumer will also lose money to prosecute these lawsuits. The most likely result will be settlement. If the consumer hires an attorney, unless the consumer takes the matter to trial, most settlement offers will be either the consumer paying his/her attorney’s fees, or the mega bank reimburses a nominal amount. Thus, the consumer will lose something by fighting the good fight.
Unfortunately, there is no right answer here. Congress has passed laws that have caused more damage to consumers than they have helped. As Americans, we have spent ourselves into oblivion. And mega banks were greedy and leant money they should never have leant.
What we need is Adam Smith’s invisible hand to start correcting the market.
