Category: Capitalism

Credit Card Companies Develop New Tricks To Get Your Money

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business1 Comment

In an article from BNET’s Moneywatch, it is reported that there are three changes, credit card companies are using to make more money. These companies are losing a lot of money because of the new regulations. It definitely killed some of the content in their bag of tricks. But they are resourceful.

According to BNET –

The new Credit CARD Act, passed last year, handed credit card companies a long list of new consumer-friendly regulations. But it hasn’t taken long for card issuers to find sneaky ways around the new rules, says John Ulzheimer, head of consumer education for Credit.com.

The new rules are going to cost the credit card industry somewhere between $50 billion to $80 billion a year, he says: “That’s enough money that they’re going to have to make it up” in other ways.

First, they have increased minimum fees and interest rates.

Second, the law requires that if your payment falls on a weekend or a holiday while the companies are closed, your payment will not be late if you pay the day after. To evade this, the companies are keeping some of their offices open on those days. Call your company on a holiday and see if they have open offices, if so, to be on time, you must pay before the holiday.

Third, the law requires college students to show evidence of a job or have a parent as cosigner before they can get a card. The companies are turning a blind eye to other students co-signing and are considering student loans as income, evading both requirements.

I’m sure I’ll have more to report about credit card company tactics in the future.

No more tears? Think again. (via Pharm Regulations)

On By southwerkIn business ethics, Capitalism, ethics5 Comments

I found this site while cruising the internet looking at business ethics blogs. They are reporting a “clandestine recall” of 88,000 defective Motrin tablets. They haven’t been around very long but they have some good stories and I like their style, so stop by and give them a look!

James Pilant

No more tears? Think again. Looks like the lovable, family-friendly Johnson & Johnson company is running into a bit of a PR problem. CNN reported earlier this week that Lawymakers unveiled documents that showed J&J hired independent contracters to carry out a "clandestine recall" of over 88,000 faulty Motrin tablets. Usually, recalls work within a supply chain, with distributors alerting wholesalers that the product is faulty. They are able to promptly take it off t … Read More

via

Mortgage Companies Flout The Law – 56,000 Foreclosures Suspended

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, ethics, Government Failure, Philosophy of Business

When you file a foreclosure the law favors the bank. All the bank has to prove is that they have personal knowledge of the case. This eliminates the need for proving each individual mortgage.

So all they had to do to meet their legal requirements was to have someone review the file. Guess what? In their hurry to foreclose on as many homes as possible (tens of thousands), they just didn’t do it. Since they didn’t do it, there is no way to know how many homes they took wrongly, or if the amounts were right, etc.

This isn’t just sloppy work, it’s a case where these large companies, in particular, GMAC and Chase, violated the law by asserting that they had fulfilled their legal requirements when they had not. But to them that wasn’t important only that they close the cases by thousands a month. Can you conceive of anything more contemptuous of the law?

I’d been reading reports of homeowners who owned their homes outright being foreclosed on by these companies and having to hire attorneys to get it stopped. I just thought they fouled up here and there. No, they didn’t even try to do what they were supposed to do and as long as the courts accepted that they had “personal” knowledge, the machinery of foreclosure went on whatever the actual circumstances were.

If you want to know why people have been unable to renegotiate their mortgages, look no further. The bank suffered little or no expense from a high speed unwitnessed foreclosure. Renegotiation would have required work, personal knowledge and a concern for the customers. Those three things were not about to happen and I believe will not happen.

From the New York Times article –

The missteps stemmed from the affidavits the lenders file as they seek a quick or summary judgment in thousands of foreclosure cases. The affidavits state certain facts about the case, including the amount owed, which the signer indicates he has personal knowledge of. Without the affidavit, the lender would have to prove the facts at trial.

In depositions taken by lawyers for homeowners, executives at GMAC and Chase said they or their teams signed 10,000 or more affidavits and related documents a month. That did not give them time to review the cases.

Defense lawyers say the disclosures are symptomatic of the carelessness, if not outright fraud, that lenders have been exhibiting for years in their rush to file cases. Many necessary documents have disappeared, with defense lawyers saying the lenders often do not even have standing to foreclose.

Callousness, cruelty, pure injustice, contempt for the law, an apparent total complete lack of concern for the hundreds of thousands of mortgage holders – this is all here.

Now, the big question, are they going to be penalized? And I don’t mean that they have to do the mortgages over again, I mean contempt citations, I mean state’s attorney generals filing lawsuits to recover the sums illegally taken from homeowners, I mean a forced reconsideration, re analysis of every single mortgage, these blackhearted villains did.

You say, James, calm down, they just messed up on their procedure. No, they took thousands of people to court based on NO knowledge of the case. They didn’t know what the people owed, the history of the loans or, in fact, whether they owned the home or not!

And get a load of this – their attorneys signed on to it, put their names on it. Let’s see a little action there. Let’s see what the state bar associations think about this.

There’s a lot more to say and I want to get this up, so more later. People have to know.

James Pilant

Personal Dharma at work (via The Divine Comedy)

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business

Well, it looks like India is catching up with America in terms of corporate financial scandals. What makes this blog really interesting, is that it’s from one of the people involved in breaking the case. It has a little bit of the detective in it. That’s rare in a business blog.

Further, our intrepid writer launches into a fairly lengthy discussion of business ethics, my turf. It’s a perceptive piece.

Please give it a read. Remember business ethics is a worldwide issue.

James Pilant

Today was the first day after the big day. Satyam finally came out with its financials last evening – restated to incorporate the impact of the 1.5 billion dollar scam perpetrated by its erstwhile chairman – in what can only be termed as India's answer to Enron. It was a proud moment for my team in finance – a moment of tremendous achievement and collaboration between us at the office of the Chief Financial Officer, our Finance team, our consulta … Read More

via The Divine Comedy

The Impact of the Deepwater Horizon Oil Spill (via James’ MBA Executive Learning Blog)

On By southwerkIn business ethics, Capitalism, Corporate Social Responsibility, Economic measurement, ethics, Government Failure, Philosophy of Business

This is an excellent thorough analysis of what happened and is happening. I’m delighted to have come across this kind of work. If you have any kind of interest in the gulf disaster or want to keep a link to where you can get ready information, I strongly recommend this article. It shows a lot of work and its cites demonstrates considerable effort.

James Pilant

The Impact of the Deepwater Horizon Oil Spill Introduction On the 20th April 2010 an explosion on the Deepwater Horizon drilling rig off the Gulf of Mexico caused the rig to sink. The tragedy that unfolded involved the death of 11 rig workers and an estimated release of 206 million gallons of crude oil into the Gulf of Mexico, (Webber 2010) and is the largest marine oil spill in history. (Robertson & Krauss 2010) This gigantic oil spill, until its capping on the 20th of September 2010, h … Read More

via James' MBA Executive Learning Blog

Business Ethics – India

On By southwerkIn business ethics, Capitalism, ethics

I wish there were more direct references to business ethics in the speeches of our politicians, and not just our politicians, the voices of the pulpit and law office are too often silent in this regard.

The is from a speech by the President of India, Shrimati Pratibha Devisingh Patil.

Finally, I would like to mention that business is for profit but it cannot be divorced from ethics. This basic principle should be the guiding principle for business houses and their management. For corporate India to become a credible partner in India’s progress, a trust based relationship between – government, organizations and society at large, is a must.

Forbidden Business Transactions – The Teachings Of Islam

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business4 Comments

One of my good friends suggested I look at a short (20 page) article that is basically a lecture by Shaikh Saalih bin Fawzaan Al-Fawzaan. (Yes, that’s all one name. Shaikh” is a title given out of respect to any scholar or elderly person in Arabic. His name is “Salih” and “bin Fawzaan” means the son of Fawzaan.)

This is a great summary of the teachings of Islam as applied to business ethics. It is most impressive. This civilization has a lot to say about what is a legitimate business practice, and they don’t shy away from the concept of right and wrong.

Listen to this –

Also, the scholars of Fiqh have stated that what falls under Najash is when a seller tells his customer: “I bought this item for such and such price”, lying about the price, so that the buyer may be fooled and buy the item at an increased value. Or it is when the seller says: “I was given this product at this price” or he says: “I received it for this much”, lying about the price. He only wants to fool the customers into bidding the price up to reach this alleged and false price, which he claims he spent for the item. This is from the Najash, which Allaah’s Messenger (sallAllaahu ‘alayhi wa sallam) forbade. It is a treachery and deception of the Muslims, and it is lying and disloyalty, for which he will be accountable for before Allaah. So what is obligatory on the seller is that he reveals the truth if the buyer asks him how much he got it for. He must tell him the truth and not say that he attained it for this much money, lying about the price. What also falls into the definition of An-Najash is if the people of the marketplace or the storeowners agree to not outbid one another when an item is presented for sale, for the purpose of forcing the owner to sell it for a (discounted) cheaper price. So therefore, they are all participating in this act, which is Haraam. And this is from An-Najash. It is also a form of taking the people’s money unjustly.

Where do we in this culture have the courage to call the continuous wall of “PR” lies and distortions, treachery and deception? That’s wonderful teaching. Now there is much in this that is not in accordance with the common beliefs in the United States, but is not every single branch of the Christian religion committed like the religion of Islam to avoid the things of this world and not to be worldly? Is that not repeatedly stated in the New Testament?

A dose of of the business ethics teaching of Islam would not be to the detriment of this country, it would be a blessing.

James Pilant

Net Neutrality – Where Is The President?

On By southwerkIn business ethics, Capitalism, ethics, Government Failure2 Comments

During the campaign two years ago, Obama repeatedly stated his support for net neutrality – Watch!

Did you hear that – “I will take a backseat to no one.” Backseat! He might as well be in the trunk for all the help he’s been.

“I am a strong supporter of net neutrality.” Okay, that’s good. How about NOW? Where is he?

“I’m a big believer in net neutrality.” Still nice, but how about saying something now?

“I remain firmly committed to net neutrality.” Is he still? I don’t have anyway to know.

Okay, guys, probably you’ve seen enough. I can find more clips. I’ve already seen them. The open internet is under attack right now at the FCC and in Congress. A bill was considered a few days ago, that would have essentially ratified the agreement between Google and Verizon dividing up the internet and giving broadband to corporations. The attacks are well funded and continuous. The President referred to the danger of large companies getting control in his many speeches.

Where is he now? Where is the President of the United States? Where are all his pretty words? If he doesn’t speak soon, he will only be commenting on the division of the web into corporate sectors after it’s done.

If there is no net neutrality, this web site may become so slow as not to be viable or simply not deemed worthy of band width. Under the new rules, the FCC cannot issue any regulations but can hear complaints. Thus, if I am treated wrongly I will be able to complain to the FCC and should they decide in my favor after months during which my audience has gone away to other sites approved by the great media companies, that will fix everything, right? I’ll be all whole and returned to where I was. Right?

There are tens of thousands of sites like mine. And these voices cry out for advocacy for the poor, or the environment, etc.., some cry out for political action, …., some broadcast every crazy theory you can imagine, … and some are people just crying out that they are there – they are significant – they are important – they plead for attention and recognition.

And soon, these voices will be silent, their bandwidth divied up for movie companies and media channels and, of course, the occasional lapse where they allow a semi-independent voice to speak.

Pretty words are not the same as action. Eloquence is not the same as standing up for your beliefs. Political expedience cannot be an excuse of inaction where action has been repeatedly promised.

Where is the President? Did he mean any of that stuff he said? Is there time left for him to do or say anything?

James Pilant

Making The Evil Suffer!

On By southwerkIn business ethics, Capitalism, ethics, Philosophy of Business3 Comments

People ask me what can be done about corporate crime. Usually I say, “Enforce the laws we have on the books and make them do real prison time as well as pay fines.” That will go along way to stopping that kind of crime.

But there is something, we all can do – we can take our moral responsibilities seriously.

You see we depend on the state to enforce the law and generally we assume that is enough. It is not.

When a white collar criminal walks the street after a wrist slap of a fine, justice is defied and the nation tarnished.

But You have a duty to justice as well. People would think twice about committing crime if the passive acceptance that justice was done by prison or fine disappeared as people realized their continuing duty. How do you exercise your duty for justice? When you meet one of these thieves, walk to the other side of the street, refuse to shake their hand. When these criminals are hired by a new company that explains blithely that they want their expertise, you can stop doing business with that company.

But above all it is our silence that demonstrates our lack of commitment to the principles of justice and citizenship. These criminal should be afraid to walk the streets not because of physical danger but because they are likely to be cut or insulted.

“White collar” criminals (and I truly hate that phrase – whoever commits serious crimes against the larger society to the tune of millions of dollars is a scoundrel and a disgrace to be shunned and despised just like the lowest bank robber) live in a cocoon of comfort. They go to the right churches, have the right friends, zealous business writers will minimize or deny their guilt, and their connections in industry and government continue unabated. Everything they hear is that everybody does it and if only the little people, the little people like you, could understand their job pressures and the unreasonable nature of the regulations, and the cruelty of the prosecutor and the randomness of it all – (other people have done worse so why arrest me), you would not persecute them like Christ on the Cross but honor their contributions to society.

You have a duty to justice to shock them out of that cocoon, to make it hard for them to get work, to stigmatize them and make them suffer. Justice does not stop at the prison door. If we can maintain records of where pedophiles live, surely we can track the financial offenders who have stolen so much and damaged society so thoroughly.

It is for you as well as the government to wield the sword of justice. Do not forget your duty. Do not forget your nation and your responsibility to it. Remember the evil that these men have done.

Do not harm them physically, take them down a peg. Don’t hurt their bodies, hurt their feelings.

I tell you truly when the great malefactors of this society are punished by the public in this fashion, a very large portion of this kind of crime will simply disappear.

When we act as negatively toward a white collar criminal as we do a man wearing a shirt and pants with opposite patterns, when we are as critical of these criminals as we are of people who live on the streets, when we are as uncomfortable in their presence as when a thoughtless person talks loud and long on their cell phone, they will change their behavior.

James Pilant

The Problem of Monopoly

On By southwerkIn Capitalism

The Problem of Monopoly

You are probably aware that one of the airlines will no longer serve food on flights. This is an outgrowth of the concentration of airlines as their numbers diminish. If you don’t have to compete; you don’t have to provide services or make your pricing competitive. Every American who uses air travel will face increasing fees and dismal service because in a monopoly you don’t have to do a good job or provide a decent service. You have to pay them anyway.

James Pilant

This is Edward Lotterman writing in the Pioneer Press –

Increasing monopoly power can get you coming and going, especially at the airport. The decreased competition in air travel resulting from successive mergers among airlines has already increased air fares. Now a pending take-over of Dollar Thrifty Automotive Group by either Hertz or Avis promises to reduce competition once you are off the plane.

But these days, questions of monopoly power seem a dead issue in Congress and among the general public. Such apathy is true even in the face of growing concentration in banking and financial services, where just three banks now hold a third of all deposits and are making well over half of new mortgage loans. Teddy Roosevelt must be turning over in his grave.