Marble Falls        One of the saddest things about contemporary capitalism is that there are constant scams designed to rip-off consumers.  The United States has whole agencies that are designed to protect consumers and oversee such shenanigans, like the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB), and that’s a good thing.  Unfortunately, big companies also hire whole gaggles of lawyers to obfuscate, delay, and mitigate their dealings in what we might kindly call “gray” areas where caveat emptor – let the buyer beware — has more standing than often toothless rules and regulations.  Recently, there have been several examples of these kinds of offenses which make the point clearly.

The FTC announced a $10-million-dollar settlement with CarShield. “The administrator of …vehicle service contracts, agreed … to settle charges of deceptive and misleading advertisements and telemarketing pitches.”  Simply put, car owners that bought the policy thinking that they were paying every month for a plan that would cover car repairs when they needed them, found out that really wasn’t usually going to be the case.

Good that they stopped this outfit, but I have to wonder how many similar policies are much the same?  Anytime you buy various power tools or electronics at Home Depot, Lowes, Amazon, and the like, the cashier will ask you if you want a “service contract.”  It doesn’t take much of a look at some of these to not be reminded about how a rich person has to thread the eye of a needle to approach heaven.  In this case, the number of real repairs the plans cover is marginal, and the opportunity to blame the user is paramount.  I wish the FTC and CFPB would put out a list or certification on how many of these are likely worth a damn, much less a dollar.

Then there are all the financial products that are cousins to payday loans and the like with excruciating interest rates that prey on the poor and inattentive or struggling consumer.  A headline in the Times trumpeted the fact that JPMorgan Chase, the largest credit card issuer, was going to begin blocking the use of “its credit cards to repay ‘buy now, pay later’ installment loans.”  They deserve absolutely no praise.  CaptialOne, the fourth-largest issuer, stopped this practice four years ago in 2020, saying they didn’t customers to “pay other forms of debt” on their cards.

Why is this a horror?  Paying this way pyramids the interest charges.  A consumer would be paying interest on the “buy now, pay later” plan, often called “pay in four,” because they break the payments into quarters, and they would usually also end up paying the standard card rate of 22% on their likely personal card balance.

Furthermore, Chase is only moving a half-step ahead of the CFPB, which has indicated that it is going to classify the “buy now, pay later” products as credit cards in their own right.  Bank of America and American Express, shamelessly, are still allowing their cards to be used in this predatory manner.  Worse, all of these outfits, including Chase, already offer “pay later” options in order to compete with the “buy now” companies.  Consumer Reports made the point that “it was already ‘standard practice’ for banks to bar credit card holders from using them to make direct payments to pay balances on other credit cards.”

Whether it’s the alleged “repair” plans or these wink-and-nod predatory products, all of this adds up to a whack-a-mole gotcha game that companies are playing fast and loose against consumers, especially vulnerable populations, until they get caught, run the clock out, and finally give in before they have to pay penalties.  Tragically, none of them should have been allowed to get away with this stuff in the first place, and certainly don’t deserve any credit from anyone when they finally say “uncle” and throw in the towel on their scams.