Banks Use "Farming Kit" Lists To Pitch To Troubled Borrowers

New York Times:

"It's like I've got some big tag: target this person so you can get them back into debt," said Ms. Jerez, of Jersey City, who still gets offers, even as it has become clear that loans to troubled borrowers have become a chief cause of the financial crisis. One letter that arrived last month, from First Premier Bank, promoted a platinum MasterCard for people with "less-than-perfect credit."

Singling out even struggling American consumers like Ms. Jerez is one of the overlooked causes of the debt boom and the resulting crisis, which threatens to choke the global economy.

Using techniques that grew more sophisticated over the last decade, businesses comb through an array of sources, including bank and court records, to create detailed profiles of the financial lives of more than 100 million Americans.

Read the whole story: New York Times

Comments

[DomainDiva]

I received a letter from 'someone like the businesses described in the article'. The details in it were absolutely personal and I felt that my privacy HAD been invaded. I called the company and registered my 'extreme unhappiness with the situation' and told them that the next call would be from my attorney. I have not received any letters like this again.

[darthdarcy]

Blood sucking leeches, loan sharks and swindlers.­.!

[arvay]

Amazing gall, and I hope there's a legal case for conspiracy to commit fraud (again).

What the government should do is force these banks to put everyone on their "mined" list on a list of people they will not solicit for at least five years.

We should also have a government-financed program that helps people restore their credit-worthiness and offers a course on how not to get overextended and be ripped off.

Ultimately, there ought to be strict and inescapable government regulation for reasonable interest rates that companies can charge for revolving accounts, and strict guidelines for maximum debt based on income. Regulators can adjust as needed as the prime rate fluctuates, but there should be strict measures that as much as feasible prevent people from going over their heads. All credit advertising would need to be OK'd before it can be used.

By government fiat, these companies would be limited to a 2-3 percent profit margin. Only the best-managed companies could survive under these rules.

Let the Darwinism begin!

[TrooAmerican]

This isnt stupid by the banks, they know exactly who they make the most money from.
Rich people always like to stand around blathering about how they "do the most business so they make businesses money" or "they donate the most per person" blah blah.

They pay their bills faster and more completely becuase they have more money and know that paying interest costs them more than they can make on the stock market.
They get better rates to start with because they can pay for it all and do.
They give bigger donations because its all tax deductible for them and they always Take in far more than they give out.
You dont see rich people pulling in Net $150,000 a year and then donating to charity $110,000.
No. You see them donate 5 or 10k and brag about how much they give. while it only take about $50k net for them to live on, the rest goes into savings and investments.
While a poorer person makes $30k per year net, costs $29,900 to live on, and they give $50bucks for the year to charity. They just gave 50% of their savings to charity to help people who have nothing.
Thats reality.