$11 mistake earns 0.0% sympathy from Citigroup

[Newsjock]

Source: Minneapolis Star-Tribune

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.

... 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.

Read more: http://www.startribune.com/local/79369657.html

[Skittles]

1. this is just plain fucking thieving

:thumbsdown:

[roguevalley]

10. he needs to go on teevee and then haunt their sorry asses.

[dkf]

2. Zero interest loans are the biggest scam ever.

Don't do it.

[napi21]

4. I hate the deceptive promotion of the zero int. credit buys, but

they ARE very specific when you make the purchase that if the payment in full is not received by the due date, int. is due from day one. I've used them several times, mainly to use THEIR MONEY, but I always pay online and always a week early so there's never a queston!

My suggestion is don't ever use them unless you already have the money and there's no question that you will be able to pay it off by the due date. Using their money is good, but if you fail, the price is way too high to take the risk.

[dkf]

5. I figure why risk it.

Its simply an invitation to make a mistake. That is how they make their money. GOTCHA.

[marthasp6s]

6. Yes you are right

I don't trust them either!

[hfojvt]

9. they do have that risk

it's a bummer, but that's what the customer agreed to when he signed up for the deal. It's a litle bit like picking apples in an orchard that is full of bear traps. You can get some apples, but if you mis-step, it's quite painful.

[BR_Parkway]

13. Seems like Citi knew it what the risks are when they did their funny stuff

as well, but they don't get the same treatment. Its a bummer, but they should have failed

[rollingrock]

3. These banksters have nothing on the mafia

I like to watch a lot of crime shows...and I've never seen a scam on those fictional television programs as outrageous as these banksters are pulling in real life.

[HipChick]

7. You have to watch these like a hawk..

I have called up citi and bitched, and they have either credited me back interest or changed the APR..

[Hestia]

8. Okay, so evidently his lawyers does agree about the interest on interest

Has that law changed? I just don't understand how CC companies can do that.

On the 0% interest, that is how I buy everything. I make payments, paying it off before the date, and don't pay all that deferred interest. It's great and I don't see how people can say it is irresponsible not to pay interest on a loan.

[Hannah Bell]

11. 30% interest on interest? loan-shark rates.

[Dogmudgeon]

12. Mr. Senbet should get a PR guy and hit the media circuit -- HARD

If adverse publicity caused TPTB to penalize a financial institution -- say, by means of demanding quicker TARP loan repayment, or denial of further goodies -- they would quickly change their evil ways. And there is only one way to do that: media sunlight, invoked by popular noise.

Ultimately, the high-PR route is a decision for Senbet to make, but I am hoping that soon, someone who gets shafted becomes a multi-billion-dollar squeaky wheel.

--d!

[Selatius]

15. Corporatists use that tactic all the time. They want something? They get a PR firm to make it good.

They test a few terms and slogans on focus groups and see which one works. Once they've perfected their message, they sell it to the masses like cheeseburgers at McDonald's. Gets them every time. It's how the corporate barons have so much power in America. It's how they turned an "inheritance tax" into a "death tax" that the common man hates even though it only hits the wealthiest.

Of course, Mr Senbet's case doesn't need focus groups. The story inherently strikes a chord with the public who too face the wrath of bankers and credit card sharkers.

[JCMach1]

14. Maybe CITI deserves it if Abu Dhabi wins their lawsuit