Forum Post: In the United Arab Emirates, debtors get more time to pay.
Posted 11 years ago on Sept. 22, 2012, 5:57 p.m. EST by DebtNEUTRALITYpetition
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It's so weird how it works in the United Arab Emirates. People complained when the rules changed because people had too much debt, so the banks came up with a COMPROMISE!
http://www.thenational.ae/business/banking/uae-borrowers-get-more-time-to-pay
In the U.S., we have a populist president who is banking on a slim majority thinking he is a populist yet he can't get one thing changed to help consumers with debt.
It doesn't read like much of a compromise. More a return to long terms of repayment and loss of the ability to borrow until payment is made.
There is little a president can do to modify the behavior of individuals to buy things they can't afford. The repayment of loans is just the symptom, it's the borrowing that is the problem.
It's allowing the borrowing of money with only a 2% monthly minimum payment that is the biggest problem.
The monthly minimum, way back when credit cards started to really take off, should have been 5% to 15% of the total due each month.
Even the federal reserve tried to inch up the rate to 5% back around 2004 I think it was and it was too late, too many people were already only paying back the monthly minimum payment of 2%.
If I pay more than the minimum monthly payment, I get offered more credit.
Tried to get the limit decreased, and there's no forms available for that.
shhhhh. You've learned the secret to getting more credit. However, down is up and up is down, having more credit nowadays is actually a bad thing.
All you have to do is call the credit card company and tell them to lower your credit limit, and they should do it while you wait. It's one of the few things left where you can call and actually get what you want.
It's not that easy in Australia.
There's a current class action against banks charging late fees and dishonour fees, and it looks likely to go the consumer's way. A "late fee" of $35 on a monthly $200 repayment is usurous. I would go into the bank, and make an excuse, and the teller would instantly wipe the fee, every time.
68% of consumers don't have the time or will to stand up to the system.
The credit protection insurance that then became a debt suspension insurance product might the biggest all time credit card scam.
In the U.S, I one time tried to get a bank charge reversed and the banker, without explaining what he was doing, closed my account and reopened it as another account and labeled it closed for security reasons!
Banks will also "split a fee" as a way to resolve the issue. But I have found this annoying when I KNOW I didn't do anything wrong.
It's nicest of course to avoid all the charges, but when they change terms and don't adequately notify of the changes, that's when most people get dinged.
Our main telco tried that on us when we hired an American to tell us how to "improve" our system. I had a ten-month war with them (Telstra) and got the industry ombudsman on the job. Managed to reverse a lot of bad things that started when Sol Trujillo tried to corrupt our largest service provider.
Too many people simply allow themselves to buy what they can't afford. I can't build up much sympathy for those over extended with their credit cards.
The credit card companies not only purposely kept their monthly minimum payments too low, they then created a fraudulent credit protector insurance program that overcharged by a factor of 25 to 40 times too much so that people could not insure themselves against certain unexpected circumstances.
This then set up the consumer to lose in court if they are sued when the more client friendly strategy would have been to offer an actual federally regulated credit insurance product.
Doesn't matter to me what the credit card companies do. If people insist on acting foolish and buying what they can not afford they have only themselves to blame.
There are certainly exceptions to that general statement. A very few people that suffer hardship and intended to use a credit card as a short term aid, but they are the exception. The rest created their problems through greed and foolishness and don't deserve sympathy.
your generalizations miss the mark. It DOES MATTER that credit card companies lure people into debt the same way that a drug dealer does.
It DOES MATTER that credit card companies purposely created a fraudulent credit insurance product that they regularly pay fines on so that they can say in court that they offer a way for consumers to avoid defaulting.
Any illegal activity certainly matters. The idea of luring in people is, in my opinion, simply a rationalization to forgive the foolishness of the debtor. The lack of personal responsibility is the problem not credit card companies luring people in. If people insist on living beyond their means they deserve to be in debt. I don't see where the typical spend-aholic deserves an easy way out of debt.
When the 2% monthly minimum payment requirement is then combined with credit protection insurance that is overpriced by a factor of 10 to 50 times what it should be priced, then it actually can be perceived as unethical business practices.
Go get a court to agree with you that something you claim is unethical is in fact illegal, then stop it. If credit is overpriced to the degree you say then the people using that service are not too bright.
The problem is not with the banks but with the people that use credit cards. It's trite and perhaps insensitive to say it, but you can't fix stupid. As long as people are a mix of dumb and greedy you're going to have people buying more then they can afford and going too deeply into debt. I see no reason to make it easy on people like that.
There is a legal term called...immoral contract.
Therefore unethical actions, especially when applied to adhesion contracts, can be struck down by the courts if the argument is presented correctly.
I would suggest that most attorneys who get involved in repping credit card debtors have no desire to demolish the obvious illegalities that are running rampant because they fear it will cut off their own future business.
The irony is it could expand their practice if past defaults were rewound because of the various unconscionable practices that credit card companies inflict on their customers.
You offer a theory, assume it's valid, but that all lawyers are somehow corrupt in not making that argument in court. I might site a more reasonable alternative, your legal theory holds no merit. The whole problem would never come up if people acted responsibly.
If corporations who rely on adhesion contracts actually came up with ethical adhesion contracts, there would be a lot less economic problems.
The courts have been known to stand up for consumers when they are victimized by adhesion contracts.
What can I say? I believe you're dealing with a symptom. I see the cause of the problem as each individual that lacks responsibility and feels entitled to have whatever they want no matter what the cost. You want out of debt, stop using the charge card.
what are you talking about now? I said ALL ALONG the pricing of the credit protection insurance that then became debt suspension insurance is priced 20 to 30 TIMES TOO HIGH and is then used in court to blame the alleged "defaulter" by claiming if they had been serious about their debt they would have been the severely overpriced debt insurance.
When did we mention any kind of debt insurance? That too is treating a symptom. The problem isn't with the banks that make it too easy to get into debt or insurance companies that try to get debtors to buy into a plan at any cost. The problem is with the individual person that uses credit cards to fuel a life style they can not afford.
Certainly the banks enable this behavior, because they profit from it. That doesn't change the fact that it's the person with the credit card that actually controls how much debt they walk into. I see no reason to make things easy on irresponsible people. Instead of plans that seek to make debt a painless experience on the debtor, take away their cards until they manage to pay off their debt.
Here is a chart that shows total cigarettes smoked plummeting as the price goes up. http://ars.els-cdn.com/content/image/1-s2.0-S0749379707005673-gr4.jpg
Which is exactly my point. Too low of a monthly minimum payment and people get fooled into over consumption. Raise the monthly minimum payment and a lot less people go too far into debt.
And if that chart were additionally adjusted for the almost doubling of our population over the past 60 years, the results are even more profound.
Price is a different matter, you said advertising. You want to make it easy on people, place the responsibility on the banks to force people to pay of their debts. It might work, but making credit more expensive, say by raising interest rates on an outstanding balance might work just as well.
I'd rather see a system where people are left on their own. Borrow intelligently or drown in debt. We need to develop some personal responsibility and stop blaming banks for our selfish overspending.
A trap is a trap. There would be a lot less people in hopeless debt if the monthly minimum payments were 5% or 10% of what was due. The credit card companies know this and purposely kept it at 2%, even when the federal reserve asked them to raise to to 4% back in 2005.
The problem was by then too many people were in too deep to get out, so the problem gets kicked down the road.
We could be having this same discussion about cigarettes. In the end, cigarette ads were banned from television advertising and creepy warnings were put on the side of each package.
Credit cards are headed down the same path.
There has to be something behind those numbers, because they don't seem to add up. I can't believe that the same number of smokers are smoking the same number of cigarettes.
Perhaps the same number of smokers are smoking a LOT LESS cigarettes, that I would believe, and would line up with my point.
Less overall damage from a harmful product.
The number of smokers in the US, according to the CDC, has remained unchanged at about 20% for the past 40 years. The problem is with the people themselves. Dropping the ads has had little impact on the number of smokers.
The problem is with people. It's not the banks, or the cigarette companies, or ads, or minimum payments. People too often simply refuse to do what is best for themselves. Honestly what kind of person allows himself to believe that he can always buy more then they can afford? You're allowing a rationalization that banks somehow easily trick people into borrowing to ignore the fact that the borrowers lack both common sense and personal responsibility for their own actions.
You can try to force them to pay back a greater percentage each month, but people that typically overspend are going to get themselves into debt as long as their personal greed overcomes common sense.
Banks make it easy for naive people to buy stuff they cannot afford. Then they make them pay for it together with compound interest throughout their lifetimes.
It's the fault of those who allow themselves to be enslaved.
Why not buy only what you can afford? Your salary is small yet you borrow tons of money to buy a Lexus.
Come on people. Don't borrow from the filthy banks. These Zionists will keep making money - money that YOU earned the hard way - while you lose.
Most of our problems would be solved if people lived within their means.
I agree Mowat. This can easily be changed, but only after existing consumer debt is paid down. At that point, simply raise the monthly minimum payments on credit cards to at least 5% of the total due.
The 2% monthly minimum payment is a devious trap.
Learn from their example.
Buy the most expensive car you can afford.
Insure it on a time plan.
Smash it into a wall.
Collect your cash.