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March 04, 2005

Outrage:

From this LA times story:

A stream of court cases involving credit card companies has produced public outrage in various parts of the country.

In Cleveland, a municipal court judge tossed out a case that Discover Bank brought against one of its cardholders after examining the woman's credit card bill.

According to court papers, Ruth M. Owens, a 53-year-old disabled woman, paid the company $3,492 over six years on a $1,963 debt only to find that late fees and finance charges had more than doubled the size of her remaining balance to $5,564.

When the firm took her to court to collect, she wrote the judge a note saying, "I would like to inform you that I have no money to make payments. I am on Social Security Disability…. If my situation was different I would pay. I just don't have it. I'm sorry."

Judge Robert Triozzi ruled that Owens didn't have to pay, saying she had "clearly been the victim of [Discover's] unreasonable, unconscionable and unjust business practices."

Obviously this case is picked to tug at the heartstrings. A little pathos never hurt an argument. Nonetheless...

Usury laws are some of the oldest in Western legal tradition. Indeed, Judeo-Christian tradition dictates that every 50 years (during the jubilee) debt be forgiven. There are simple reasons for this: when an honest person is in debt, that person will do anything to repay the debt. Combine this good faith with bad-faith on the part of the debt-issuer, and what is left is never-ending debt bondage. Indeed, as Kevin Bales argues in his bookDisposable People such a cycle is a recurring theme in how people are held in modern slavery. Granted, I don’t believe that Discover card wants to own people, but the potential for abuse is so massive that it has been outlawed from nearly the beginning of jurisprudence...

Posted by Andrew at March 4, 2005 04:25 AM

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Comments

If the banking industry gets that bankruptcy bill passed, this lady probably would have had to pay.

Posted by: Alexa at March 4, 2005 03:03 PM

Ugh. Usuary is just ugly no matter what side of the debate you're on.

While it's a shame what happened to the lady, it's also a shame what's happened to the lender.

Yeah yeah, "big corporation" etc. But turn it on it's end. If that lady had lent money to the corporation, and they had failed to pay, although they made a best effort, where do you think the "heartstrings" would have been pulled?

You talk about good-faith/bad-faith, but what about this case convinces you the lady was borrowing on good faith? I'll grant she may have intended, even desparately wanted to, pay back the lender, but if she _couldn't_ do so, then she was borrowing on bad-faith. Good intentions paving the way to hell, and all that. If she didn't contact the credit card company, and attempt to deal with them, then she again was demostrating bad faith. They will talk to people, they will work out terms and such that will pay off a debt, at an affordable amount. This lady is not the only person who's ever been in that position. Nor is she likely to be the last. She also could have worked with a bank or "debt consoldation lender" to get the money to pay off the credit card, and have a stable, affordable payment with fixed/flat interest. The fact she didn't, is another sign of bad-faith.

It's sad, but there's also the fact that she borrowed money. It was her choice. If she wanted the money that badly, then she should have been prepared for the cost.

I'll grant that there may have been some circumstances that make it better than what I've painted above. She could have had a medical emergency, or some other dire need for money at a time when she didn't have it. The credit card company could be lending in bad-faith, or could be using predatory practices on the old lady. They (not necessarily Discover, but CC companies have) have done so in the past, and have been found wanting in a court of law over it.

However, none of that really changes her responsibility for her actions. Unfortunately, to many people aren't being held accountable for thier actions, and that hurts the rest of us. Those of us who responsibly borrow money.

And you're right, this has been a problem since the beginning of jurisprudence. Unfortunately, it's been a problem on both sides.

Rand.

Posted by: Rand. at March 7, 2005 10:58 AM