Chase Bank Forgives All Debt Owed By Its Canadian Credit Card Customers (www.cbc.ca) 186
An anonymous reader quotes a report from CBC.ca: U.S.-based Chase Bank is forgiving all outstanding debt owed by users of its two Canadian credit cards: the Amazon.ca Rewards Visa and the Marriott Rewards Premier Visa. The bank retired both cards last year and said it's wiping out cardholders' debt to complete its exit from the Canadian credit card market. After 13 years in the Canadian market, Chase decided to fold its two Visa cards in March 2018.
The bank -- which is part of global financial services firm JPMorgan Chase & Co. -- wouldn't say how many Canadians had signed up for the cards or how much debt was outstanding. Credit card rewards expert Patrick Sojka said Chase likely concluded that debt forgiveness was ultimately cheaper than continuing to collect credit card payments in Canada. But he's stumped as to why the bank didn't instead opt to sell the debt to a third-party debt collector, which would allow Chase to recoup some cash. Chase spokesperson Maria Martinez said in an email to CBC News: "Ultimately, we felt it was a better decision for all parties, particularly our customers."
The bank -- which is part of global financial services firm JPMorgan Chase & Co. -- wouldn't say how many Canadians had signed up for the cards or how much debt was outstanding. Credit card rewards expert Patrick Sojka said Chase likely concluded that debt forgiveness was ultimately cheaper than continuing to collect credit card payments in Canada. But he's stumped as to why the bank didn't instead opt to sell the debt to a third-party debt collector, which would allow Chase to recoup some cash. Chase spokesperson Maria Martinez said in an email to CBC News: "Ultimately, we felt it was a better decision for all parties, particularly our customers."
I wish (Score:5, Insightful)
I wish good shit like this happened to me,
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You'd have to live in a country where businesses want out THAT BAD. Be careful what you wish for.
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The credit card market in Canada is fairly saturated. I can easily see how a new entrant wouldn't make money and if they didn't want to sell the rights to the Canadian version of their brand, I can see why they would just take the hit.
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The Amazon Canada card was quite popular because it was (at the time) the only credit card in the country that didn't charge the 2.5% foreign currency exchange fee, which made it fantastic for US shopping (on Amazon USA for example). Even now, you could count on one hand the number of credit cards that don't have or cancel out that fee.
Annual fees aside (they had none), once they've got a customer, they ought to be making as much money off that customer as anybody else, regardless of how saturated the marke
It's not that they want out (Score:2)
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In the US, there's a marked difference between paying with credit card vs debit card. I never use a debit card due to the significant lack of legal protections associated with debit purchases. I pay off my credit card in full each month, so it's "basically cash" for me, but I get all the protections that accrue to credit card purchases that do not accrue to debit card purchases.
https://clark.com/commoncents/... [clark.com]
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Yep. I pay my Amazon card every month...typically $2000/month.
No fucking way am I using a debit card everywhere I go. That's insane.
Re:I wish (Score:4, Funny)
I wish good shit like this happened to me,
Well.. I won the Publisher's clearing house sweepstakes you know....
Yep, I have the $10 check to prove it..
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"I wish good shit like this happened to me,"
They are lucky bastards.
Both of them.
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The article specifically says no income tax is due on the forgiven debt (i.e. Canada's laws are different).
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Chase's income tax or the people who's debt was forgiven?
Surely the US doesn't charge income tax on nonexistent income? In the case of the individuals, it's not income. They paid income tax on their actual income, then spent that post-tax money on their credit card. I suppose a few of them may have claimed deductions, but they're supposed to amend those and pay them back now.
Re: I wish (Score:3, Informative)
Forgiven debt is taxable income in the U.S.
Re: I wish (Score:2)
You earn a dollar. You pay tax on the earnings. You buy a medium potato with the remaining 70Â.
You want a big potato. You use your credit card. The bank pays the grocer a dollar and tells you âoeYou owe me a dollar.â
Then the bank develops an allergy to maple and runs away south, shouting âoeNever mind.â
You got $1.70 worth of potatoes for $1.00 work.
US legislators say âoethat makes no sense. You owe tax on the forgiven debt.â
Canada legislators say different.
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and short,long term disability insurance.
Except insurance companies are averse to insuring sick people. Which puts you in the "royally screwed" category once they decide to drop you, because no one else will touch you either.
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Except insurance companies are averse to insuring sick people. Which puts you in the "royally screwed" category once they decide to drop you, because no one else will touch you either.
No only if you ware an irresponsible gutter snipe that decided to YOLO until you had a problem. If you did the right thing and got insurance before you got sick than there IS no problem. Its also not been a problem to keep insurance if you are sick as long as you don't allow a gap in coverage. Its been that way for almost 60 years now.
Chronic conditions beginning in childhood (Score:2)
If you did the right thing and got insurance before you got sick than there IS no problem.
As Hozier pointed out in the song "Take Me to Church": "We were born sick." In a regulatory environment that allows insurers to discriminate against applicants with preexisting conditions, it's hard to buy insurance if you're diagnosed with a chronic condition before you even graduate. Autism, type 1 diabetes, and gender dysphoria are examples of such diagnoses observed in my own extended family. Likewise if you lose your job in a recession deeper than your unemployment insurance covers and can no longer af
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Yeah, fuck those irresponsible cunts born with diabetes and seizures!
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Fine is you were not born ill and didn't get ill until you were financially well off enough to be able to afford a decent insurance plan that offers long term disability.
I was born with a disability so I guess I'm irresponsible.
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In a regulatory environment that allows insurers to discriminate against applicants with preexisting conditions
It's not really discrimination. Insurance is for insuring against unforeseeable medical problems. It's not a managed health care cost plan, nor is it a socialist healthcare plan. Your health insurance premiums (or your groups premiums), are pretty much calculated by a fair and non-discriminatory equation. Simply it is...
{Your cost} = {Cost of care} * {Risk} * {Profit Multiplier}. And the profit multiplier is pretty low. Problem is that if you already know your risk is 100% for one thing, and likely ver
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The above wasn't meant to say anything about your view, your needs, nor your family. Simply that if you don't like the above, then you simply aren't looking for HEALTH INSURANCE. You really want something more like universal healthcare, which I'm not opposed to, but that is a totally different thing than health insurance. Personally, I'm not a big fan of health insurance myself. It's too easy to game the system in both directions. Insurance companies can do underhanded things to get sick people off the
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Re: I wish -wait, gifter pays don't they? (Score:2)
I thought that if I gifted you over some threshold *I* would be responsible for the taxes. So if the bank gifts the card holders isn't the bank on the hook for the taxes?
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But I am not a CPA or anything, I'm just expressing in different words what other people seem to be trying to say.
Think that through a bit more (Score:3)
I'm curious if you were in a hurry when you wrote that. Let's think this through.
Bob borrows money from Visa to buy a TV.
Bob hasn't paid the bill.
Q: Did Bob pay the bill with money that has been taxed?
A: No, he did not pay at all. It's an outstanding debt.
Next question:
Chase forgives $5,000 of debt from Bob
Bob had now received $5,000 of stuff and paid nothing for it.
Q: Has Bob received a benefit?
A: Bob got $5,000 of free shit. He was released from paying the $5,000 he owed for it. The IRS considers that
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The USA Governments will do anything to raise tax monies -- even tax non-existent things. Why, they are even trying to tax the "air we breathe" (and have been for, at least, the last 10 years).
Ah yes, the ol' "imputed income" scam (Score:2)
If we pretended that you didn't live in the house that you owned, but instead rented it out to someone else, you'd have made $x in monthly income from the rent and been taxed on it.
If you lived elsewhere and paid rent, that landlord would be taxed on that rental income that you paid.
Since YOU live in YOUR house, we'll pretend that you are paying yourself that rent, and tax you on your pretend rental income.
Bright plan that. Next up...since each person has so much potential to be special, let's pretend you h
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vote for pro-consumer candidates
Sorry nope won't do. Actually I might go register and vote for old joe now that mention it. Electing a DemoRAT would be about the worst thing that could possibly happen right now but old joe would probably be the least bad.
Pro-Consumer -> NO FUCKING WAY, i'd like our nation to have a future thank you very much. That means we need to produce and sell ideally sell to the rest of the world lets take their money and hollow out their economies again like we did in the good old days before that traitor Nixo
Stop trying to make Demon Rat happen (Score:2)
Re:This isn't an accident (Score:5, Informative)
>Bush Jr basically made bankruptcy impossible for debt under $100k
What an ignorant thing to say . . .
I *am* a consumer bankruptcy attorney, and the typical debt (not counting mortgage) is generally *far* less than that.
$30,000 isn't rare.
$10,000 rarely makes sense, and is rarely necessary (but I've handled those, too, in appropriate cases).
>If you file for bankruptcy a judge will just order you to pay it back,
Uh, no. Just not possible. Don't let reality get in the way of a good rant, though.
There is a means test now, due to the 2005 changes. NACBA (National Organization of Consumer Bankruptcy Attorneys), of which I am a member, fought those changes for several years. While we ultimately lost, we got them substantially watered down.
Anyway, the mens test *can* effectively force people with some ability to pay to pay what they "can" (it certainly has a tangential relation with reality, which can swing both ways) for the term of a Chapter 13--but then, I (and other skilled attorneys) have successfully filed chapter 7 (fairly fast discharge, no payments) for people who failed it under various circumstances.
> garnish your wages if you don't
No, bankruptcy court doesn't garnish wages, unless you actually get sued for fraud (or some other reason) and the bankruptcy court enters such a judgment against you.
>and in some jurisdictions will throw you in jail for contempt of court if you can't pay. Yes, America has brought back Debtor's Prisons.
But that simply isn't true, although it makes good headlines.
I've monitored those cases (as has NACBA), and every last one of them turns out to have been a contempt citation for defying a court order to appear for a "judgment debtor exam" (in which the debtor is questioned about assets and income), of a flagrant violation of Constitutional limits. (there have also been a couple in which a judge has, after a hearing, found capacity to pay and ordered a payment within that capacity, but there is a pretty high threshold to get there).
Overall, BAPCPA (the 2005 changes) was a horribly anti-consumer law and bad legislation. I could go on for hours about it. It is horribly flawed--but it does *none* of what you describe.
Also, note that it's not just a party thing--NACBA tried to undo it when the Democrats held the White House, Senate, and House, and didn't get any farther with them . . .
hawk, esq.
Your version makes good clickbait, though . . .
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Ok, but what happens if I get sued? (Score:2)
I can tell you that Credit Card companies have taken to swapping debt to build up enough to make it worth while to sue. And I can tell you that $10k is plenty enough to sue over. The bar, from what I can tell, is $5k.
N
I should add my experiences with judges (Score:2)
He spent about 2 years living out of his van. Only reason he got back
monopoly (Score:5, Funny)
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So.. You are saying a good parent just pays for their kids lives and decisions even after they become adults and leave home?
I got to say, my kids fully understand they are responsible for their finances because I DID NOT do that, even though I have the means. Both of my children are independant manage their own finances, one graduated from college this year debt free and the other has 3 years of college left. Both have money in the bank and manage their own finances, neither are in debt for a penny.
Jus
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Selling Debt (Score:5, Insightful)
Selling debt should be against the law.
Certainly this would make credit harder to get and more expensive. But, given the most recent economic crash was due to cheap, too easily obtained credit flooding the market, this is probably a good thing. And 3rd party credit collection orgs often resort to harassment and borderline criminal tactics to get people to pay.
Good for Chase for doing the right thing.
Re: Selling Debt (Score:2)
US dollars are backed by debt. Whenever you use cash to buy something, you are selling debt.
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If you can't see the di
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Re: Selling Debt (Score:2)
You misunderstand. If you have $10, you don't owe debt, you OWN debt. Someone owes you $10 in productive labor or material goods. The bank from which you received the $10 acts as an intermediary on your behalf. They loaned out that $10 to someone else.
And if you wish to collect the debt owed to you, you do so in the form of goods and services you purchase by selling your debt instruments (cash).
People like to pretend that calling it cash or adding unique regulations and intermediaries somehow makes this dif
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Both of you should look at credit unions in your area. Someone at work pointed me at Provident (bay area) and I got a great interest rate AND the checking account pays better interest too.
My credit union sold my loan to a bank before the ink was dry. It was sold again before my first payment. Then sold about six months later. Reread the posts above. You have no control over who your bank loan is sold to. I'm dealing with a bank I'd never heard of before.
Same here. Started with a credit union. One year later it was Wells F'in Fargo.
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But, given the most recent economic crash was due to cheap, too easily obtained credit flooding the market, this is probably a good thing.
This isn't what caused the crisis. The loans were fine on thier own. It was the process of taking low quality loans and rolling them up into the least risk group mortgage backed securities, fraudulently, while hiding where the loans originated and foisting them off onto unsuspecting people. If the risk disclosure had been kept honest, there likely wouldn't have been any crash.
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But anecdotally, I wouldn't have much reason for pause on the introdu
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I doubt they will play the same card twice, if I had to guess I'd say the global economy is slowing down, possibly in a recession already, and we have already lowered interest rates too much while at the same time racking up too
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Selling debt is how the financial system works.
Car dealers are in the business of selling cars, they are not a financial institution. So when they sell you a car with a loan, the first thing they do is sell the debt. This is true for most major transactions. Without the selling of debt, you would likely not have been able to buy the house you live in.
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In purchasing my last car, the initial company that provided financing has remained. I would not be happy if that changed. In the past, changes have resulted in bad customer service, faulty reporting of payments, and in one case, err
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Adding processing fees to "non-performing debt" is indeed not legal.
When a loan holder sells a loan, the law requires that the terms remain exactly the same as they were when the loan was initiated.
https://www.huffpost.com/entry... [huffpost.com]
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How many people... (Score:2)
...were tipped off ahead of time, got a card, and then maxed it out.
And how many of these people were employees of Chase or their friends?
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Doesn't matter. Making $200 worth of payments on a $2000 credit line that's being forgiven sounds like a good deal to me.
PR Stunt (Score:3)
It's almost certainly a PR stunt. "Look at us. We're leaving a market and we're being nice about it!" Odds are it's a quite small number of borrowers owing a relatively small amount of money overall.
That said, writing it off is definitely simpler than doing whatever is required to sell the debt. There are certainly complications for selling debt under Canadian banking laws (and probably privacy laws, too). Regulators almost certainly would be involved. However, no regulator is likely to complain about "we're simply going to declare everyone's outstanding debt paid in full and go away".
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Or just cost. It's probably cheaper to wipe the debt off the people who still are paying it off, than it deal with all the red tape of government regulations in trying to pass the debt to someone else to handle. Even a corporation knows spending $1M to co
I doubt it (Score:2)
Sorry but... (Score:2)
Why is this on this site?
Better to be debt free in the first place (Score:2)
As nice as that sounds, I'd rather be debt free in the first place. It is incredibly freeing to not have all those payments and obligations. When a person lives within their means, life is much less stressful.
Yeah, I'd like a forgiven loan as much as the next guy, but I'd rather not have one in the first place.
And yes, it is possible for ordinary people to be debt free, not just the rich. It's not as much about how much you make, as it is how much you spend.
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"Jesus Christ could be the CEO of one of them and I'd think there is still some scam going on."
It's still a corporation, it doesn't care about anything but making money....
Re: No way. (Score:2)
Came here to say this. The fact that they are walking away from marketable collections suggests that something in CapOneâ€(TM)s CA customer acquisition, account maintenance or debt collection practices was about to get them sued and/or fined. By just wiping out the debt (which should largely benefit thei
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There's also a matter of reputation to consider. If Chase had sold the debt to a collection agency, all customers affected would carry hatred for Chase for the rest of their lives.
Debt collection agencies are slime. An organization that without notice or permission turns your debt over to a collection agency is violating a trust. (I'm looking at you, State of Connecticut.)
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Read the fine print.
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Yeah, this is very fishy. Normally if Chase didn't want to continue to operate in Canada, they'd sell the debt to someone who did.
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Yeah, this is very fishy. Normally if Chase didn't want to continue to operate in Canada, they'd sell the debt to someone who did.
As others pointed out, the market is saturated. Why buy/bail out a small competitor?
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Money is money. You wouldn't buy Chase's business, you'd buy the debt they're holding, presumably at a discount that's considerably larger than 0% but also somewhat smaller than 100%.
Hell, I'd have given them ten cents on the dollar for some of it.
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Yeah, this is very fishy. Normally if Chase didn't want to continue to operate in Canada, they'd sell the debt to someone who did.
It's quite possible the cardholder agreement (and/or applicable law) does not allow selling debt to third party collections if the account is in good standing. So if no other bank wanted to buy it at face value, they had two choices. Write it off or continue to pay to maintain a business infrastructure in Canada.
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The customer is always the necessary evil to make money.
As is the employee. NOBODY hires anyone for any reason other than thinking that they will cost less than they generate in additional revenue.
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Depends on what you do with the time, you could be working in that time and make more than the 5-10 bucks you pay him to do your lawn. That way you make more money than if you did it yourself.
Re:No way. (Score:5, Funny)
My cynicism towards these banks has no bounds. Jesus Christ could be the CEO of one of them and I'd think there is still some scam going on.
If any bank claimed to have Jesus Christ as their CEO then I'd know there was some scam going on.
Scam (Score:5, Funny)
If any bank claimed to have Jesus Christ as their CEO then I'd know there was some scam going on.
I think you nailed that one.
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Looks like they did it right to me. One guy claims he got $6K forgiven. Looks like he may a good move.
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Hm. Good point. Perhaps this is a ploy to encourage more people to carry credit card debt. At 20% interest.
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If you're carrying a balance on your card, you're doing it wrong.
Don't let them make money off you, take the month free loan, but always pay in full.
Do you seriously think anyone who is going to take this advice hasn't already heard it in the 70 years since credit cards were invented?
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If you're carrying a balance on your card, you're doing it wrong.
Don't let them make money off you, take the month free loan, but always pay in full.
Interest is a financial killer when you are paying it. You want people to be paying interest to you.
Credit card interest is a drain on one's standard of living. IF you are carrying debt on credit cards or for depreciating assets, you are living less well off than you could be. Of course, that means doing without until you can pay for what you want and not buying on time, and that can be hard. Getting out of debt is doubly hard, because you have to do without, pay down the principle while you are paying
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Yea, That's interesting. Sometimes the dealers do things based on who gets what bonus. So you actually cost the dealer money I'm guessing.
I figure that most folks would have trouble amassing enough to pay cash for a car. I know I do. I'm OK with debt on secured assets when necessary. I don't like depreciating assets like cars being purchased on time, but I'm OK as long as you owe less than the car is worth at all times. It's not my favorite thing, but I'm OK with it.
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You have to pay eventually, either one amount now or a larger amount spread over time. If you pay up front you'll be better off.
Learn to manage your money properly and live within your means, save now and buy later etc.
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Excuse me, but do you expect sympathy for people spending money they can't spend?
I'm a die-hard liberal socialist, but that's even too off the deep end for my tastes.
Re:Carrying a balance (Score:5, Insightful)
Depends on why they did it.
If they had to buy that new 4K TV with all the bells and whistles or the newest iPhone, no, I don't have sympathy for that.
If they had to pay the deductible for their emergency gallbladder surgery, yeah, I do.
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Aren't we talking about Canada now? I thought they do have a medical security system that isn't just a mockery of the term?
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Odd. It works pretty well in Europe.
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Re: Carrying a balance (Score:2)
I know it was just an example but it's Canada, the only thing you'll pay for gallbladder surgery is for parking at the hospital.
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Those monsters! Last time I went to the hospital parking was free!
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If they had to pay the deductible for their emergency gallbladder surgery, yeah, I do.
Wait what? People are out of pocket for emergency medical procedures? What kind of a 3rd world are you describing?
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What, that gall bladder cuts itself out??
Nothing is free. Someone always pays.
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Excuse me, but do you expect sympathy for people spending money they can't spend?
I'm a die-hard liberal socialist, but that's even too off the deep end for my tastes.
So I guess the idea of "Basic minimum Income" isn't on your list of Liberal Socialist ideas you support then?
I see a level of conservative ideology in you, you seem to have the personal responsibility value in what you say... Maybe you are not as die-hard liberal socialist as you think... :)
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Quite the opposite. It is. I do think that's eventually all that will keep us from a social collapse and if we don't ensure that everyone has enough to lose to play along the rules, people will soon find out that not doing so en masse is what will allow them to take it by force. The worst thing for social peace is people with nothing to lose.
But I do think that people who want more than survival will have to work for that. You cannot have both, if you want money to spend on additional goods, especially leis
Re:Lies and damn lies... forget stats (Score:4, Insightful)
It could just be that it was too expensive to keep collecting. The article says the card has been defunct for 2 years and the only remaining customers are those paying down old debt. I'm sure those people have been targeted for debt settlement, restructuring or refinancing for the last few years and just haven't done that.
So perhaps a few million dollars at best, trying to sell/collect the debt is expensive on its own, paying the fee to MC/Visa every year and having a team of customer support, collections, billing, the branding etc costs a ton of money too.
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I've heard/seen stories that they were worse in Canada for a while. Also there are people who don't get their money back out of the banks for a long time or ever, like large escrowed deposits with complicated ownership conditions. This is especially useful in periods of high inflation... Also ask the Cyprus depositors about rule changes.
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If the remaining banks can't rip me off, what's the problem?
Competition to lower prices and improve quality is good, but mandating it still is better. Because even if the competition gets eliminated and a monopoly arises, laws are still laws.
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Banks in the USA go broke all the time. Not a single Canadian bank went bust during the Great Depression. 2 small regional banks failed in the 80s, and that's about it. The Great Recession? Same as the Great Depression, none.
Perhaps that's why Canada's banking system is ranked the safest in the world.
' How much did those bailouts of yours cost? Nobody knows, because the knock-on effects are still happening.