These two messages are self-explanatory. I have high regard for the writers of both.
Tandy’s message: Awhile back, you kindly introduced us to the new E*FUND account of CITIZEN’S TRUST. When I wrote and told you I’d opened an account, you asked for feedback. I could not imagine that I’d ever have anything to say about it, as I simply decided to move some cash from my Wachovia account to a place where it could do some good. [Citizen’s Trust is a family of “socially responsible” funds.] However, a MOST interesting thing happened — here, then, is my story.
Basically, I’ve been wanting more cash and fewer securities in my investment portfolio, so I had been looking for a money market fund. Since I have always felt remiss about not using WORKING ASSETS as my long distance carrier, I thought the E*FUND would be a perfect solution. I would have a place to put my cash, and Citizen’s Trust would have $15,000 more to invest in good things. A nice win-win situation, eh? And I owed it all to you. [Uh, oh.]
Meanwhile, I had been talking with a friend whose work is in socially-responsible portfolio management. We were talking about Amy Domini and the Domini group of funds, which he strongly prefers to Citizen’s. I asked him why, and told him I’d just sent cash to the E*FUND. He’s a sunny guy, so it surprised me when he said, “Watch out. These people have a tendency to be odd.”
Odd? I could not imagine how this could affect me and my account. It’s not like investing in Russia, for example, where personalities often play a role in whether one’s money is safe.
I thought little of this, until a couple weeks later, after my check had been processed, when a knock at the door brought a registered, return-receipt letter to me from Citizen’s Trust. The main text read:
Dear Tandy Solomon,
Thank you for your interest in the E*FUND and Citizen’s Trust. Your account was established contingent on proper verification of your employment and credit history. We regret that we are unable to continue the relationship for the reason indicated below:
DELINQUENT CREDIT HISTORY
In reviewing your application, we received information from TRW Information Service, PO BOX 949, Allen TX 75002, telephone 1-800-682-7654.
Once your initial investment clears our escrow period, we will remit your entire investment by check. . . . If you have an automatic deposit, these will no longer be accepted. . . . Please do not attempt to write checks from the account or use the debit card. These redemption requests will not be honored. [I had not received either one, nor had I planned to use either.] . . . If you have any questions or require other information, please call us at 1-800-223-7010 . . . .
The letter was unsigned. I guess they must send out zillions of these and so felt it would be tiresome for some person to have to be actually personally responsible for and responsive to the letter.
What a way to blow my day. As I’m sure you can imagine.
I stared at the letter for awhile, then went through my to-do pile and took out Citizen’s funds prospectus, which I’d intended to send to a friend. I let it drop into the trash can, and sat there, sort of dumbly. I thought vaguely of calling the 800#, but saw again that there was no name, not even a stamped signature on the notice, and changed my mind. NOT very inviting.
I thought about calling this TRW and finding out what in the hell was wrong with my credit. So far as I knew, I had no credit, good or bad. I don’t use credit cards, my car has been paid off for years, I rent my apartment, etc. I’m the sort of mountain person who used to keep cash in little brown envelopes in my safety deposit box. Out of ignorance more than anything else. That, and stories from my grandfather. I’m odd, too, I guess. But in a good way. . . .
I called TRW and a recorded voice told me to send them a copy of the letter, along with a formal request for a copy of my credit history. I did so, finished up some work, and went to the mailbox, where I found, sandwiched between The New Yorker and a catalog for the Territory Ahead, ANOTHER copy of the same letter, also unsigned. Guess they wanted to make doubly sure I was not going to use the debit card I did not receive to take out some of the money that I had sent them.
Ironically, I got something ELSE in the mail as well. A human-signed letter from some newfangled customer-service-center rep at AT&T, saying that she had been assigned to be my PERSONAL account services contact, should I ever need assistance, since I was such a valued customer. She also asked if I had received the box of Harry and David cookies that AT&T had sent to thank me for my years of valued custom. Overkill, wouldn’t you say? As an AT&T shareholder, I was rather nonplussed, and yet very amused, in light of the juxtaposition.
So. ONE behemoth who I don’t much care about (ESPECIALLY since Robert Allen let go of those 40,000 people this summer), begging for my continued business, and another, much smaller company, whose vision and whose success feel personally very important to me, who has told me in the strongest and most distant language that it does NOT want my money because, because, well, WHY?
Even if I wanted access to the money, which was not the case for me, I would only have access to MY money, and so why would credit be a problem?
The whole thing was baffling and very disturbing to me. Still is.
To conclude, all’s well that ends well, I suppose. I never DID hear from TRW, but ran a credit check here locally and learned something I might not otherwise have known, which is that a $1,000 student loan my father had offered to pay back as a Xmas present eons ago was never paid. That was good to know about and clear up. I wonder if the TRW report will show anything else. Can’t imagine what, but I’m ready.
And, as for the fifteen thousand? Well, about three weeks after the two letters, I received my original $15,000 back in the mail, along with about $34 in interest, I think.
And you know what I did with it?
I bought a house.
What the heck, I figured, there are other, more fun, ways to diversify one’s holdings than money market funds. I used the money as the downpayment on a mortgage for a house which I’ve bought for rental property. Kind of a spontaneous thought, but I like it.
I had NO problem getting a mortgage. Got it from the first loan officer I talked to, at Nationsbank downtown. Powerfully intelligent, competent, thorough, detailed, overqualified loan officer. Left no stone unturned.
On December 2nd, I’ll be a homeowner for the first time in my life. An added benefit, I suppose, is that I will be doing something that will give me some credit history. I’m 34; it’s probably time.
I’m saddened and disturbed about what happened with Citizen’s. And I won’t be using any of their investment products.
I hope you’ll keep telling us about these interesting opportunities you find for us as thoughtful consumers. No doubt I’ll try more, and I’ll continue to keep you abreast of what I find.
Whoa. Apart from being excited for Tandy’s new house, this message naturally left me troubled. I forwarded it to Sophia Collier, who owns Citizens Trust.
Sophia’s response: Thanks for sending me your reader’s letter & comment. Certainly our letter to him could have been warmer but there really isn’t any best way to tell someone they are turned down for a financial product.
Why do we care about credit ratings? The E*fund does have strict credit standards as it is at relatively high risk for fraud — the MasterCard agreement requires that we guarantee all payments and even with a debit connection to a live balance there are many ways that clever frauds can hit accounts like E*fund and it has happened to us. Therefore we do a credit check & turn down accounts that score poorly.
From what your reader said in his letter, it seems that he did not have any credit history except a negative one resulting from the student loan. This is the type of thing that scores poorly — particularly at a distance. Ironically we may have helped him get his house because he was able to clean up the loan before going into the bank for the mortgage.
Obviously I am sorry that this guy — who seems quite nice — was so upset but sometimes things like this happen. If he had picked up the phone maybe he could have straightened it out. TRW undoubtedly will get back to him within 60 days. It is a legal requirement as you probably know and then he can straighten that out there too. Welcome to the world of credit bureaus!
Are we odd? In the last year we got in more cash than any other socially responsible fund group and our social index holds more than twice as many assets as Domini and has better financial performance – YTD we are up 25.6% vs 24.4% for Domini. Thankfully, not everyone in our work shares the “sunny” disposition of Tandy’s portfolio manager friend.
Both messages are so reasonable, to my ear, I like to think Sophia’s may satisfy Tandy, and that Tandy’s may lead Sophia’s group to improve its rejection letter. It should include a bit of explanation and encouragement; e.g., “Often, these things are the result of misunderstandings or clerical errors, but we cannot afford to take a chance. Our agreement with MasterCard holds us liable and — believe it or not — even with a debit card, we’ve had to eat some losses. We hope you will contact us again after you’ve worked with the credit bureau to attain a top-notch rating. We’re really sorry for any inconvenience. You’ll be receiving your money back, with interest, shortly.”
Tomorrow: Time to Buy Oil Drillers?
Quote of the Day
Children nowadays are tyrants. They contradict their parents, gobble their food and tyrannize their teachers.~Socrates
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