The Chase-Manhattan Affair
This is a long story, but it had a lot of ramifications in my life.
For over a decade, I’ve been a member of REI. For about 8 years, I have carried and extensively used their credit card. Basically, you get 1% of your purchases back in cash each year. Unlike Discover, it is widely accepted, there’s no fee, and there’s no limit to the rebate. I normally pay it off each month to avoid interest charges. Since I’ve used it extensively in my business to buy servers for clients, etc., I’ve built up a huge credit line with them.
The program was originally operated by Seattle First National Bank. About five years ago, SeaFirst was acquired by Bank of America. While I’ve had problems in the past with Bank of America, they did a satisfactory job with the program.
Then, about three years ago, Bank of America sold the portfolio to Chase. This was done with very little warning. I was actually out of town when a letter arrived from Bank of America informing me of the transaction. It explained that the new card would have a rebate option but the terms were very poor and I did not want to participate. I followed the instructions in the letter to opt-out of the transfer and close my account. I paid my bill in cash at the nearest Bank of America branch and that should have been the end of it. I few weeks later, I received a zero balance statement from Bank of America as expected.
About a week later, I received a credit card from Chase. I immediately called them, explained that I didn’t want it, and they told me they would cancel it and purge the records. A few weeks later, I got a statement with a zero balance from Chase.
The next month, however, the statement arrived with a single charge of over $800 from Macromedia. Since I did not want the Chase card and had closed the account, I had never initiated a transaction on it. I called Chase, explained the situation and was told that it would be taken care of. To protect my legal rights, I also wrote a certified letter. I also obtained a letter from Macromedia stating that they did not charge that card.
Chase responded to my letter by just sending a copy of my statement. I wrote numerous certified letters and they replied with form letters that didn’t addresses the issue. Finally, I gave up and just ignored them. Their collectors called me over and over. After explaining the situation to more than 10 people, I sent Chase a letter telling them not to contact me anymore. The Fair Debt Collection Practices Act requires them to stop, but they didn’t – a clear violation of Federal Law. Finally, I set my phone system to automatically disconnect any phone calls from their entire area code. That got rid of them for about two months.
Chase then sold the debt to another collection agency. I sent them a letter explaining that Chase defrauded them and they sold the debt to another agency. This went on several times and I tired of sending certified letters to people, so I quit and ignored them.
Finally, a company called “Georgia Receivables” owned by a lawyer here in Atlanta bought them. They sued me for it. They also sued me in a higher court than necessary (not small claims court) where individuals usually cannot successfully represent themselves. No lawyer would take the case except one and he told me “I’ll charge you $2,000. I’ll pay them the $800 and keep the rest.” I did get some legal advice from several lawyers and was able to successfully defend myself. Georgia Receivables gave up and dismissed the case.
Having thought that everything was fine now, I forgot about the matter until several more months went by and I received a letter from American Express. Amex informed me that “due to negative entries on my credit report, they were lowering my credit limit to $50, effectively canceling my card.” Chase had placed a charge-off on my credit reports for the bogus account.
Since I deal mostly in cash and don’t have a lot of credit accounts, the Chase entry made it appear that I would default on 20-30% of my accounts. Given that the amount wasn’t very much, it looked like I could not even afford the $19 “minimum monthly payment.” Needless to say, my FICO score took a nose dive.
It took over 18 months to remove the items from my credit reports. As recommended by many consumer rights “gurus,” I sent each of the credit reporting agencies a letter explaining the situation. I also enclosed a copy of the lawsuit documents showing that the case had been proven in my favor in court. All three credit reporting agencies wrote me back and told me that they would only accept a change initiated by Chase and that they would not accept documentation from me.
The credit reports have now been cleared up. The whole debacle took three years. During this time, interest rates have gone up. The cost to me in terms of lost time, legal fees, court fees, certified letters, and added mortgage interest charges is over $300,000. While it’s important to stand up for what’s right and not be bullied, $800 would sure have been a lot cheaper!
Consumer experts continue to say that Chase is a horrible company. Their card issuing policies have not changed much either. Since my card was issued, Chase has issued live credit cards to children, dogs, and a tree!
