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Generational Dynamics Web Log for 2-Oct-2012
2-Oct-12 World View -- American Express fined $112.5 million over massive consumer fraud

Web Log - October, 2012

2-Oct-12 World View -- American Express fined $112.5 million over massive consumer fraud

Syria's Foreign Minister gives farcical speech at the United Nations

This morning's key headlines from GenerationalDynamics.com

American Express fined $112.5 million over massive consumer fraud
Subprime mortgages are back in volume
EU finance ministers appear ready to give in to Athens rioters
Syria's Foreign Minister gives farcical speech at the United Nations

American Express fined $112.5 million over massive consumer fraud

Elite American Express 'Black Card'

Elite American Express 'Black Card'

Several months ago, I reported that Capital One was fined $150 million for massive credit card fraud. Now it's the turn of the crooks at American Express. Since 2003, the company has lied to customers, charged illegal fees, and discriminated against older customers (presumably Boomers).

You may think that American Express is a "reputable company" that would never do anything like this, so this is a good time to remind you of a scam that I reported in 2009. The Senate Commerce Committee discovered the scam works as follows: You make a credit card purchase online from Priceline or other retailers. At the end of the transaction, you're offered a "reward" of some kind, a coupon worth a few dollars. You click the fine print, and it turns out that you've agreed to let the retailer charge your credit card $10-20 per month. According to the Senate reports, the online retailers were fully aware that they were defrauding consumers, but they didn't care because they were making so much money -- $1.4 billion from millions of customers.

Here's the list of online retailers that the Senate found committed this fraud:

1-800-FLOWERS.com    Hotwire           Priceline.com
AirTran Holdings     Intelius          Redcats USA
Classmates.com       FTD               Shutterfly
Continental Airlines Orbitz Worldwide  US Airways Group
Movietickets.com     Pizza Hut         Vistaprint USA
Fandango

These are like American Express: all "reputable companies," and all crooks who feel they have license to screw their customers in any way they like.

I have a personal experience with American Express. I discovered that American Express had signed me up for some kind of completely worthless "rewards" program, and was charging me $55 a year. They had simply added this charge to my credit card. They have computerized profile systems that attempt to identify the best way to market to different consumers, and I believe that they targeted me for the following reasons:

I'm an older person (Boomer), and a lot of older people don't pay close enough attention to the items on their credit card bills.

I use a bill payer service to pay my bills automatically. Amex knew this, and they also knew that a lot of people who use bill payer services don't check their bills as closely as people who write out checks every month.

A lot of older people also have help with their bills in other ways. Perhaps an assistant or son or daughter pays his bills for him, and that person would have no idea that a "rewards" program was a scam.

Their scam certainly worked on me. I paid the annual fee twice before discovering it. I called up customer service and told them I never signed up for the "rewards" program, and demanded that they cancel it and refund the two payments. I've been a cardholder since 1976, but customer service said to me, in effect, "F--k you." So I canceled the card entirely. F--k them.

I have to repeat, as I've said so many times, that the world has changed enormously since the 1990s. At that time, Amex really WAS a "reputable" company, as were the other companies listed above, and a scam like this in the 1980s would have been next to impossible. But ever since the Gen-Xers reached middle management positions in the last decade, we've had one major crime after another -- from tens of trillions of dollars in fraudulent mortgage-backed securities to the recent LIBOR scandal.

As I've also said many times, there may be no more criminals among Gen-Xers than among other generations, but what defines the Gen-Xers and makes then unique is their adamant refusal to blame other Gen-Xers for anything. Boomers happily sent Boomers to jail, but the Obama justice department has not sent a bankster to jail for the massive fraud that caused the global financial crisis. Thus, banksters are free to continue committing crimes, with no fear of prosecution.

And sure enough, Amex is not admitting that they did anything wrong, and none of the Amex crooks will go to jail. Bloomberg

Subprime mortgages are back in volume

Financial institutions are convinced that the housing bubble collapse is over, and that it's time to start offering subprime mortgages at high interest rates to borrowers who otherwise wouldn't qualify for mortgages.

This is just one more disaster waiting to happen. As I wrote last week, the housing bubble collapse is far from over, and, I estimate that home prices will fall an additional 10-20%. The people who are saying that can't happen are exactly the same people who were saying in 2006 that there's no such thing as a housing bubble, because "Everybody has to live somewhere!" UPI

EU finance ministers appear ready to give in to Athens rioters

Tempers are flaring as the EU "troika" negotiators have returned to Greece to try once again to agree to austerity measures that Greece has repeatedly committed to but has never implemented. It's becoming abundantly clear to everyone that Greece will not comply with the austerity demands. Period. Especially with tens of thousands of Greeks rioting and demonstrating outside the Parliament building.

Nonetheless, the rest of Europe is terrified at the prospect of Greece defaulting and leaving the euro zone. The domino theory is no longer being discussed as a possibility, but rather as a likely scenario, with Spain and Italy quickly following Greece. It's likely that the troika's final recommendations have been preordained from the beginning: No matter whether Athens implements any austerity measures or not, they're going to get their bailout. Spiegel

Syria's Foreign Minister gives farcical speech at the United Nations

Syria's foreign minister Walid al-Moualem blamed the conflict in Syria on "organized terrorism" sponsored by the United States and its allies. According to al-Moualem:

"We also wonder to what extent the statements of Qatar, Saudi Arabia, Turkey, the United States, and France that clearly induce and support terrorism in Syria with money, weapons and foreign fighters, are in line with the international responsibilities of these countries in combating terrorism."

One Security Council diplomat described the speech as "orthodox, predictable and completely out of touch with reality."

Presumably al-Moualem's speech was a response to President Obama's speech to the same audience last week, when he said:

"In Syria, the future must not belong to a dictator who massacres his people. If there is a cause that cries out for protest in the world today, peaceful protest, it is a regime that tortures children and shoots rockets at apartment buildings."

The Syria situation has been a disaster for United Nations, for obvious reasons. We have a country that tortures children and shoots rockets at apartment buildings, and the U.N. politicians have been nothing but a bunch of buffoons for 18 months. The U.N. has actually made the situation much worse, by providing cover for increased violence by Syria and Russia with such farces as Kofi Annan's six-point "peace plan."

A web site reader has posed the interesting question, "Will the U.N. go the way of League of Nations?"

History has decided that the reason that the League of Nations failed in the 1930s was because the isolationist United States was never a member. That's why, after WW II, the United States did a 180 degree turnaround and became the world leader of the United Nations, even agreeing to hold its headquarters in New York.

But now we're seeing the United Nations looking as pitiful and powerless as the League of Nations. That's because in the 1930s, much of the world was in a generational Crisis era, and the same is true today. In other eras, compromise and accommodation are possible, but in a Crisis era, nationalism and xenophobia become prevalent, and compromise becomes impossible, on both a national and international level.

Once the Clash of Civilizations world war is over, the survivors will settle on some reason why the U.N. failed. This time, it won't be because the U.S. wasn't a member, but maybe the world community will think up some other reason to blame the U.S. Whatever the reason, the survivors will form a United Nations II after the war ends.

An interesting question is: What form will the new post-war United Nations take? Will there still be a Security Council, and will the U.S. still have a veto? Will the General Assembly have more or fewer powers? An interesting speculation. Al-Jazeera

(Comments: For reader comments, questions and discussion, see the 2-Oct-12 World View -- American Express fined $112.5 million over massive consumer fraud thread of the Generational Dynamics forum. Comments may be posted anonymously.) (2-Oct-2012) Permanent Link
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Generational Dynamics Web Log for 2-Oct-2012 2-Oct-12 World View -- American Express fined $112.5 million over massive consumer fraud

American Express fined $112.5 million over massive consumer fraud

Subprime mortgages are back in volume

EU finance ministers appear ready to give in to Athens rioters

Syria's Foreign Minister gives farcical speech at the United Nations

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Generational Dynamics Web Log for 2-Oct-2012
2-Oct-12 World View -- American Express fined $112.5 million over massive consumer fraud