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Maxed Out

maxed%20out.jpgElsewhere on these interwebs, I’ve discussed my disgust with the credit card industry, which often preys on college students and others with no credit history, in an effort to bilk them for late charges, over-the-limit fees, and interest payments made on unpaid balances. It’s really a despicable industry, especially when you get to the dastardly collection practices.

So, I feel a certain amount of sympathy toward those who get swindled by credit card companies, particularly those who sign contracts with tiny, tiny print warning that interest rates can skyrocket if a payment is made as little as one day late or – in some instances, even – if a late payment is made on something else entirely, like a mortgage (and don’t even get me started on FICA and credit scoring – it’s all a huge racket).

But, then there are the idiots who make it easy for others to check their sympathies at the door and place credit card irresponsibility squarely on the shoulders of the consumers. Such is the case when talking about Joshua Enders, who has filed a lawsuit against Well Fargo, in the hopes that he can get it certified as a class-action suit.

Enders was an 18-year-old college student when he signed up for his credit card, an ideal target for credit card companies, who can sink college students in a lifetime full of debt (since many spend thousands but don’t have the income to pay off balances). Enders is seeking unlimited damages and trying to force Wells Fargo (and the consumer credit card industry as a whole) to do away with hidden fees. A laudable goal, indeed.

But, Enders should not be the figurehead for the class action lawsuit. Why? Because Enders is suing based upon finance charges he racked up for going over his credit card limit. Such finance charges are, indeed, sometimes unfair and something should be done about them. But Enders went over his limit 62 times in one year, racking up $620 in finance charges in exchange for $1115 in cash.

That’s not actually the credit card company’s fault; that is all on Ender, who apparently never checked his statements. It’s one thing to make a few late payments or rack up a couple of overdraft charges and then argue that you were a victim of hidden fees. But, after a certain point (maybe 10 or 15 finance charges?) those fees aren’t hidden anymore – they are right there on your credit card statement.

In this situation, I think that Enders just didn’t care; he kept going over his limit because he wanted the cash and never considered or even cared about the consequences, which he assumed wouldn’t catch up to him for a few years anyway. Well, they’ve caught up to him. And now he’s crying foul and bringing a lawsuit. And when the jury refuses to find his case sympathetic, consumer credit card owners as a whole will suffer for it. So, in a way, Wells Fargo has lucked out. After all, you don’t offer up a man who has killed 12 cops as a test case against the constitutionality of the death penalty. And neither should you offer up a man who exceeded his credit limit 62 times as the class representative in a consumer class-action lawsuit.

(Hat Tip to Overlawyered)

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Comments

Wellllllll.... yes, Dustin. I will not split hairs with you. Much. As the story you link to shows, even his lawyer suggests he could have been more on top of his statements. But right at the beginning it says he was offered and accepted 'over draft protection', which might lead one, presumably even an 18 year old college unfamiliar with the ways of banks and credit card companies, to assume that he could go slightly over his limit without incurring a $40 charge for each instance and $10 a day for every day it remains over.
Perhaps we need to lobby our lawmakers to draft laws which require lenders to spell things out in clear and plain language, such as: Overdraft protections are very short-term courtesy loans your bank allows to account for small discrepancies and math errors in your accounting. There will be a charge.
And then require Finances as a topic in all Grade 10 math classes.