The first thing to say — as you’ll read in what I found to be some fascinating detail tomorrow — is that it’s not GM we should be primarily mad at. But I didn’t know that when I wrote about being charged $20 for being two or three days late on a $55 payment. (It turns out I may not even have been late — the company we should be mad at just likes charging the $20.)

You didn’t know it either when you responded. And boy, did you ever respond. A sampling (with some good general advice from Dorothy Mallonee at the end):

Don Hauge: You are so lucky to be able to vent publicly. If that had happened to me, I would have been just as mad, but I wouldn’t have been able to tell thousands of people about it. At least when you vent, someone at GM might actually read about their own stupid policy and change it. When I vent, the only one who hears it is my wife.

I am indeed lucky to be able to vent publicly. One of the great things about the Internet is that it makes it easier for all of us.

Dr. Tom Novinger:

You paid the $20?

You paid the $20?

You paid the $20???!!

How could you? Didn’t we grow up in the sixties, when we were all protesting over things like free speech, free love, taxes and the war in Vietnam?

Being lucky enough to vent publicly, I figured I’d protest that way. And then catching up on the past week’s Wall Street Journal, I saw something to suggest that my friends the trial attorneys — who do some excellent things for consumers despite the things for which I criticize them — may soon put a stop to crazy late charges. “Attorney Finds a Way to Battle Bill’s Late Fees” (October 6) describes Washington, D.C., attorney Philips Friedman’s attempt to fight late fees by using contract law. The idea is that being late with a payment is a violation of your contract — but contract law limits the damages to the actual harm done. And it would be very hard for a credit card company to argue that my being a few days late on a $55 payment has somehow cost them $20.

T.F. Gazda, “steelworker & consumer”: It seems I’m going through “deja-vu” reading your newsletter here…. I’ve had the exact-same experience — but with DISCOVER CARD (you know, “the card that pays you back”). I’m HAPPY to say that DISCOVER CARD SERVICES have a much more palatable group of “customer service team members” . . . in every case where there was a “slip up” (of my accord), they reversed the charges willingly. Their card is the ONLY one I use! THAT’S a GREAT COMPANY!

I don’t have ANY respect for GM or its products . . . being in the steel industry, I’ve seen our prices (steel sheet) DECLINE over the past 10 years, while it seems GM’s prices have increased at a rate greater than inflation, & they BEAT ON US for lower prices (“what about inflation fellahs?” . . .). I’ll NEVER EVER buy a GM vehicle, just for this reason. That company is BULL-HEADED & too big & working with management’s-style of the 1960’s (or was it the 1760’s? ) . . . . Fred Flintstone must be their CEO . . . I’m just so aggravated by their LACK of true customer focus that I had to put it on record . . . . I own a Dodge & a BMW. General Motors WILL lose — they just can’t see it yet (dinosaur company). Unload your stock in them. Get a Discover Card ASAP, & cut your losses on that silly GM card . . . . GM isn’t WORTH it — & there are far-better cars on the road.

Well, I’m keeping my stock, but with more qualms (though as you’ll read tomorrow these turn out not to have been GM customer service reps at all).

Rafal: I had the same thing happen to me when I missed the pay-by date on my MBNA Platinum Plus card by a single day (I had been out of town for about 10 days and had forgotten to pay the bill before leaving). Not only did I get charged the $20 or $25 late fee, I was also charged a ludicrous amount of interest (MBNA uses some horribly evil method for computing interest expenses). One would have thought that for a card that advertises itself as a step above a gold card, they would be willing to bend the rules for a cardholder with a pristine payment history. Guess that’s where the American Express people still have their niche well carved out. American Express allows you to call in payments, which has saved me on occasion when I realized that the payment was due in 2 or 3 days. I simply made out a check, dropped it in the mail, and at the same time called Amex to let them know it was on the way. No hassling with late fees, no guilt, and everyone’s happy. For this alone, I’m willing to shell out the annual fee on my Amex Gold card (and the fact that Amex is still one of the most pro-customer credit companies when it comes to disputes and other billing oddities. This has saved me from unscrupulous mail-order merchants once or twice).

Alan Silverstein: Today’s GM Credit Card Rage column was identical to the experience with my GM Gold card when I called to protest the same late fee. I pride myself on a virtually perfect credit rating and was not about to let “late mail” cause me to have to pay $20 when one payment came in a day late. I too got on with a GM service rep — and I am nice by nature in situations such as these, rare as they are — and immediately found the same confrontational attitude as you did. I have dealt with many service reps over the years on a variety of credit card issues (this new “late charge” that the industry has been levying caught me by surprise, as it apparently did you as well). Regardless of the other issuers, I have found that only with the GM service center have I almost immediately been put on the “defensive.” Virtually all other card issuers will let you slide when it is apparent based on your history that any lateness is clearly an aberration, and is not recurring. Not so with GM. I immediately closed out the card, with the service rep almost “daring” me to do it. I have also advised many an underling to relay common customer difficulties to higher-ups, but have always felt that these messages fall on deaf ears. I lost my points, but I will not buy a GM product until I see that they have “reformed.”

In light of what you’ll read tomorrow — these are not GM reps or GM’s policy — it’s amazing GM has allowed its reputation to get hurt so badly with this.

Tony Levelle: I once worked for a major credit card company writing technical manuals. They treated their workers worse than anyone I’ve ever seen. Stress illnesses were endemic. A friend went to the doctor with headaches, nausea, and constant vomiting. This was so severe that she was dehydrated by the time she made it to the clinic. “Oh,” the doctor said, “You must work at (major credit card company). I’ve seen several people with these symptoms.” Anyway, I feel that bashing credit card companies is a Good Thing. Keep it up. They won’t change, but I’ll feel better.

Perhaps it’s just this stress that led Deep Plastic, tomorrow’s source, to crack.

Rich: These people are idiots sometimes. Don’t they realize that the average dolt (that deserves to pay the $20) will not even have the common sense to call up and complain? It would be in their best interest to just waive it for anyone that calls. Meanwhile, I’m still waiting for Nation’s Bank to send me a letter. Last month they sent out a statement saying that their Blockbuster Visa card would no longer be giving the 1% in Blockbuster Bucks. They are doing this to “improve service” and are “investigating other alternatives.” Yeah, right. Lunacy abounds.

John Dobrinski: I spent six months trying to get GM to remove a several hundred dollar charge on my card that was done by an unknown person charging an airline ticket. I could not believe the incompetence of the customer service dept. The GM card customer service also has three different departments throughout the country so when you call the 800 number you might get any one of the three offices. They also do not give out their last names or phones so you cannot get hold of the person again. By the way, when I wrote to GM in Detroit complaining I was told the card is not affiliated in any way with GM.

True, except that GM made the deal with the company that services the card, and GM has its name and logo plastered over everything. If it’s the GM card, it’s the GM card. If they really have no control over the servicing company, they were nuts to sign a deal like that.

Rich Stehnach: My wife and I have purchased two Oldsmobile Silhouette minivans using the $4400 in credits earned from our GM Gold Card. With GM’s decision to limit us to $500 a year instead of $1000 a year in earnings, we certainly no longer feel as compelled to spend our next $50,000 on GM products. It’s clear to me but obviously not to GM that they’re probably viewing the billions that GM Card holders have accumulated in credits as a huge liability rather than the potential trillions in sales awaiting them an asset. The shortsightedness of corporate America should never be underestimated.

MK: We also once had a payment arrive late to the GM card, (I think in ’95) and indeed at that time a simple phone call did waive the interest and fees. You are correct in getting this steamed over the $20, and the fee is not only unjustified, but stupid for GM and the GM card.

All this illustrates a basic truth about life, and why the free market is only the “best system on earth,” and not a “perfect system.” You see, we all live on a planet that is by and large populated by idiots. If 90% of potential consumers of anything are willing to put up with unreasonable fees, or exorbitant prices, or shoddy workmanship, or poor quality, then the providers of the product or service can probably do all right only selling to them. We each have a duty, at least as fundamental as participating intelligently in our democracy, to participate intelligently in that most democratic of all human systems — the free market. When anyone of us forgoes our responsibilities as consumers, we diminish all the other consumers in our society by misallocating resources towards expensive or shoddy or unjustified goods and services.

You see? You’re not just fighting fer yer own twenty dollars, Jimmy (picture Ma Joad borrowed for a Frank Capra movie on credit card rip-offs, with either Jimmy Stewart or Henry Fonda in the role), yer fightin’ fer all the people. But while it might not be as noble as all that — the point of Adam Smith’s invisible hand is that you don’t have to be noble, you can just be out for yourself — it’s true: a market works best when information is clearly disclosed and consumers are intelligent in assessing it.

Bill Fletcher: Not only do they now clip $20 for a “late fee” — but don’t look now . . . some cards have removed the – once 10 day grace period – once 5 day grace period – so there is now NO grace period. This is with both of my credit cards. And I am getting the statements only two weeks before the due date. They can easily hold the posting of the payment one or two days so it’s getting very hard to even get them the payment on time if you have the time to run from the mail box to your checkbook and back again (and who does have the time). I’ve made my calls to them — Bank of America and Wells Fargo — and my “Sean” said “we’ve had to do it because people are taking advantage of the grace periods.” Need I say more?

I think Bill refers here not to the ordinary grace period — no interest charged if you pay your bill in full by the due date, which most cards still allow — but an extra little grace you’d get to avoid charges if your payment came in a few days after the due date.

Rick Lafford: I’m like you in that I tend towards used cars and drive them mostly to the end. My current is a 1990 Camry bought from National in 1992 for $11,000. Still going strong at 173,000 miles.

So why did I ever fall for that GM rebate-on-new-cars-only card in the first place? I guess it was the 5% that got me. Not my brightest move — though you never know. One of these days I might go crazy and buy a new car. Do they still make Buicks? When I was growing up — well, you should just have seen the looks on all our faces that day when my Dad brought home a brand new Buick. (Well, it was the 50s.)

And finally, more good advice from Dorothy Mallonee: “I feel qualified to comment, both as someone who’s had a fair amount of congress with customer service personnel as a consumer, and someone who’s been on the other end of the phone. I was a service rep for ‘the telephone company’ for 13 years, and have spoken to — and, I hope, helped — a fair number of customers.

Some pointers:

  1. Know what you want. Your best bet is to make clear not just that you’re angry, but what action will satisfy you. Be reasonable, of course, but stand firm.
  1. Everyone has a boss. Although this varies by organization, the front-line people are often all too eager to kick you upstairs. The first-level supervisor usually does not want you to escalate. Play these cards for all they’re worth, and never hesitate to escalate ever higher.
  1. Co-opt the person you are dealing with. Use every cheap trick you know to create the illusion that you and your new ‘friend’ are a ‘team’ trying to reach a mutually-agreeable goal. [This also works well if you ever find yourself the hostage in a kidnapping. — A.T.] For example, shamelessly use plural pronouns to discuss ‘our problem’, and ‘what we can do about it’.
  1. Keep venting to an absolute minimum. You have no idea how anger can affect people who have to listen to it many times during the day. It frightens some people and others simply become angry in turn. Anger sounds very personal to the rep on the other end of the phone line, even though you know the rep is usually just a functionary with little more control over the situation than you have. So vent, but use your dog or your co-workers, and try to keep your interaction with the rep as calm and business-like as possible. The points you score with your booming voice or your razor wit will rarely carry the day. [You mean sarcasm doesn’t make people love me? Uh, oh!] Stay focused on the problem and your expected solution.

Tomorrow: Deep Plastic Reveals All – The Inside Story



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