President Barack Obama and top banking executives met Monday to talk about payback of bailout money and the industry's fierce battle against consumer protection reforms. This came after Obama said they "just don't get" why many Americans are angry.
Maybe bankers would have "gotten it" better had they paid a visit to the corner of Fifth and Marquette that day, where parking lot attendant Assefa Senbet wondered how his $11 mistake had turned into the television loan payment that may never end.
While Citigroup's CEO was announcing the company would pay back $20 billion in bailout money so they could escape increased oversight, Senbet received a letter from a Citigroup subsidiary denying his request to forgive a minor miscue on a "zero interest" loan for a flat-screen television.
Senbet's ordeal began in 2007, when he purchased a 43-inch Phillips television on credit from Citicorp for $1,748. "I like to watch CNN, world news, and National Geographic," said Senbet, an Ethiopia native and U.S. citizen. "And every Sunday I watch the Christian channel. I like that very much."
Senbet's English is passable, but he's certainly "not fluent in contract law," said Mark Fiddler, an attorney who volunteered to help him. "It's not my area of practice, but I'm a lawyer, and I don't understand this."
When he bought the TV, Senbet signed a receipt that mentioned at the bottom a "deferred interest promotional offer" but did not explain it. Nor did the salesman at Sears, he said.
But Senbet planned to repay the loan on time anyway, and did so for nearly 18 months. He often sent payments early and even paid more than the minimum "because I wanted to pay it off early," he said. Citicorp never complained about the overpayments.
But just as he was about to settle the loan, Senbet mistakenly sent a check -- 12 days early -- for $70. The minimum payment due was $81. Senbet came up $11 short, and his nightmare began.
So what did the company that received $45 billion in bailout money from taxpayers such as Senbet -- and $300 billion in government guarantees for its "toxic investments" -- do? It dropped its "Penalty Pricing" hammer, billing Senbet $887 for interest going back to the date he purchased the television. Citicorp is now charging him 30 percent interest on that outstanding debt, making a payoff nearly impossible.
"I'm very confused," said Senbet, who has parked cars for 10 years. "I don't want to pay for this for the rest of my life."
"Citicorp is using Assefa as a cash machine," said Fiddler. "What rankled me the most is how Citibank can get huge bailouts to stay afloat, then this is how they pay back the taxpayers who help them out when they get in debt."
According to the Consumers Union, 87 percent of the credit card companies impose severe penalties for small infractions, and 92 percent of those do it indefinitely. Lauren Bowne, staff attorney for the consumer group, said laws meant to prevent outrageous penalties have been passed and repealed, and she doesn't see the gotcha tactics ending soon. "It's unfair and traps consumers with good intentions," she said.
"This is just unacceptable," said Sen. Amy Klobuchar. "When someone uses a credit card to make a purchase, they shouldn't have to go to law school to understand the terms. And when they make an honest mistake because they couldn't decipher all the legalese, they shouldn't be slapped with a fee that threatens their credit. Enough is enough."
Klobuchar said her office will look into the issue.
Fiddler appealed to the bank and contacted the Minnesota attorney general's office, where he got sympathy but little help.
The AG's office has no jurisdiction on the federal law, so someone in the office wrote to Citicorp, asking for leniency for Senbet.
Monday, Senbet got Citicorp's curt response letter saying: tough luck.
"We expect the same from all our clients no matter where they come from," wrote Citicorp's Tomeka Harris.
Actually, I believe Harris when she says the company is willing to gouge anyone, regardless of national origin, creed or color.
Fiddler, who normally does child protection cases, is considering suing the company under "unjust enrichment" laws, but he'd rather settle. Senbet could also simply walk away because he has very few assets to seize, and he has already said he'd return the TV that has now cost him almost $3,000.
"He's an honorable man," Fiddler wrote to Citicorp.
Meanwhile, Senbet will continue to tune into the Christian channel every Sunday on his 43-inch screen, unless they take it away.
"I use to like it," said Senbet. "Now I see the TV, and it just makes me confused."
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