Friday, March 09, 2007

What a santuary city (Los Angeles) thinks of BofA and their no SSN credit-card product

Just read an interesting article from the Los Angeles Business, which indicates that 74 percent of the respondents in an informal poll are against Bank of America's "no SSN needed" credit-card product.

Pretty interesting since in Los Angeles, even the LAPD (Los Angeles Police Department) can't ask if someone is there legally, or not.

A lot of people seem to be upset that this financial product will help enable illegal immigration and make it (easier) to commit identity theft and credit card fraud.

Criminals and a lot of illegal aliens are already using other people's social security numbers. Obtaining a fake SSN is no problem in Los Angeles, or just about any other area in the United States.

A lot of illegal aliens pay for the credit they get with other people's identities. After they assume and probably (pay for) a good identity, it isn't prudent to invite negative attention.

So far as illegal immigration, Bank of America isn't the only company enabling illegal immigration. In fact, they are merely going after a market segment, that has no problem finding employment.

Even if fraud does go up, I doubt Bank of America is planning to lose any money off this product. High interest rates and a hefty fee structure can cover a lot of fraud write-off.

With that thought in mind, is Bank of America taking advantage of the very people, they claim to be helping?

Just this week, Congressional hearings were held about credit card companies taking unfair advantage of the public with the interest rates and fees, they already have in place.

USA today has an interesting editorial about the hearings entitled "When interest rates hit 32%, there ought to be a law."

So far as the fraud aspect, there are many who think part of the problem is that the industry has been issuing credit, somewhat irresponsibly. This makes it pretty easy to commit credit-card fraud.

Another big story this week is the Visa summit, where the payment card industry is meeting to discuss fraud issues. Perhaps, high interest rates and hidden fees aren't covering fraud losses as well as they used to?

Recently, merchants and credit issuers have been arguing about who should be responsible for eating the costs in data-breaches. All is not well within the industry, itself.

I'm not sure how much all these events tie in together, but maybe someone should start listening to the honest customers?

After all, when all is said and done, honest customers end up paying for all the fraud, as well as, the salaries of those selling these financial products.

Maybe what we really need to do is figure out why credit card fraud and identity theft is so easy to commit. Hopefully, the Visa summit will be a forum that will inspire some good ideas (and commitments) that can be put into practical use.

Interesting comments from readers (potential customers) courtesy of the Los Angeles Business, here.

2 comments:

Tom Fragala said...

Ed,

B of A limits its risk by requiring an up front cash deposit and by limiting the credit lines. It's not just about charging high interest rates, because if the account holder defaults and it results in a charge off, then the interest rate isn't much help. However, I am sure the interest rates are not very low either.

Ed Dickson said...

Interesting - just read another blog post indicating the interest rate is 20 something percent for these products.

Along with a deposit - ouch!

Thanks for the comment.