Since When Does Our Police Department Do Free Enforcement for Private Companies?

I have been meaning to write about this for ages--this and the myriad other ways that various entities--local, national, private and public--extract every possible penny they can from me and my neighbors, family, and friends.

As far as I can tell, all of these practices are immoral, and most of them are either illegal or would not stand up in court, were someone with as much money as a wealthy corporation to provide a challenge.

The photo at right shows a metered parking lot, located at approximately 399 Main Street, Malden, Massachusetts.

Like most drivers, when I see a parking spot with a parking meter, beside a big, blue public parking icon ("P"), I take it that I'm looking at public parking--whether it's on-street or in a lot.

In the case of the parking lot in question, if you parked here and your meter did in fact expire, so that you returned to your car to find a City of Malden parking ticket on your windshield, you might be aggravated to have been ticketed, but it likely wouldn't occur to you to question whether the city had a right to ticket you in the first place. Right?

Well, I'm telling you that in this lot, the city should not be ticketing you or anybody else.

Here's why. This parking lot is not a public lot. That's right; it's a privately owned lot, and all the money deposited in its meters is destined not for the City Treasury, but for a private company. I am not sure which company is the owner. I believe it's either LAZ or Fitz who, between them, have a good stranglehold on area parking. Let's say it's Fitz. In any case, it ain't the city.

So, tell me why you should be required to pay the city $15 if you are late feeding Fitz's parking meter. What city rule or ordinance have you violated? What jurisdiction could the city possibly have over parking time limits in a privately-owned parking area? What right might the Registry of Motor Vehicles possibly claim to put a hold on your ability to renew your license and thus operate a vehicle legally simply because you didn't pay parking citations wrongfully issued to you while you were parked on private property?

And why should my tax dollars be used to pay a policeman to check the meters in a private lot?

I don't know which is worse!

If Fitz wants to monitor its own lots and tow cars away when meters expire, let them. If they want to impose some kind of legal fee structure to deter parkers from not feeding their meters, fine. In that case, they can take the market consequence and see if parkers still want to park there given the extreme enforcement. But it is outrageous that a private company that is too stingy to hire its own parking lot attendants is able to avail itself of free policing on the taxpayers' tab!

And it is indefensible that while residents endure double-digit unemployment and struggle to put decent food on their tables and decent roofs over their heads, that they are once more nickle-and-dimed by their own government--in this case for dollars to which the government ought to have no legal claim whatsoever.

Here's the cherry on top. You know how I found out about this debacle? I was at the Malden police station to get a parking permit, and in the course of speaking with the officer at the window, he began quietly to complain about the wrongs of parking in Malden. It was this officer who told me that the parking lot on Main Street does not even belong to the city, that all the officers know it, and that they resent being made to ticket residents who are parked there.

The officer, who asked not to be named, wondered aloud how many cumulative police hours are wasted patrolling that lot as a freebie for Fitz that could otherwise have been used to do something actually related to public safety or improving, not deteriorating, the quality of life of Malden's residents.

What do you think? Is there any possible justification for the city's issuing public parking tickets to cars parked on private property?

Government Contracts Used as Cash Cows to Nickle and Dime Taxpayers for Private Profit

Let's start this story with the Massachusetts law that prohibits charging extra for credit card transactions

MASSACHUSETTS POSSESSES A "NO SURCHARGE RULE" FOR CONSUMER PURCHASES

"No seller...may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means."

Statute: Mass. Gen. Laws Ann. ch. 140D, § 28A(a)(2) (West)

Discounts for Cash Payments are allowed in Massachusetts

Discount offered to induce payment by cash, check or other means not involving a credit card not considered a finance charge if offered to all prospective buyers and disclosed clearly and conspicuously.

Statute: Mass. Gen. Laws Ann. ch. 140D, § 28A(b) (West)

Statutes cover: Credit cards only

Statute: (Mass. Gen. Laws Ann. ch. 140D, § 1 (West))

And yet...

Yesterday I went to City Hall to pay a state excise tax on my car. It turned out that they didn't accept payments for that there, so they referred me to the next town over, whose city hall has an electronic kiosk (a machine) where taxpayers can pay their excise tax.

I drove over to the other town. I didn't have the excise tax bill with me because I had misplaced it. Since it can be easily looked up using my driver's license number, I wasn't concerned.

I found the payment kiosk. It turns out not to be owned and maintained by the Commonwealth, but rather by a private company (Kelley & Ryan Associates) that, it seems, has a contract to collect various payments (like excise tax or parking tickets) owed to the Commonwealth.

I initiated my transaction, following a system of prompts that began by offering me a selection for taxpayers who didn't have their bill right there with them.

I entered my name, date of birth, and license number. Then I had to enter my Social Security number. This rubbed me the wrong way. I do realize that SS numbers are in fact taxpayer ID numbers. However, here in Massachusetts, we specifically have the option of not associating our SS number with our driver's license, and it should be very simple to accept my payment and associate it with my vehicle simply by using my license number.

I have no particular confidence that this electronic kiosk is managed in a secure-enough fashion to sufficiently protect my identity. That's why this method of requiring input of my SS number bothered me.

The next step was to enter a number printed exactly as shown on my bill. Wait, wasn't I in the processing flow for people who don't have their bill handy? Yes, I was. Anytime I see a system designed that badly, it greatly lowers my confidence in the general care taken to build the system. So at that point, I was certainly regretting having entered my social security number in the previous step.

Needless to say, I couldn't proceed with the transaction.

The kiosk was located right next to the payment window of the city Collector's Office. An employee of that office saw me standing there, and saw that I was leaving the kiosk without finishing. I guess she must see that a lot, because she called me over to the window to tell me that I didn't need to use the kiosk--that she could take my payment in person.

Great! A helpful, friendly civil servant. I gave her my driver's license and credit card, and after a few moments, she handed me a printed receipt. Mission accomplished!

Back home, I took the receipt out of my purse and went to file it in my desk. That's when I noticed that I'd been charged an extra 3% for an "online convenience fee." Huh?! I hadn't paid online. I hadn't even paid at their kiosk. I had paid in person at a city office. Right?

I phoned Kelley & Ryan Associates right away. I told them what had happened, and asked them why I'd been charged extra. The employee of Kelley & Ryan told me, "you have to pay extra to use a credit card. Three percent."

"Umm, that's illegal," I told her. "You know that, right? It's illegal in Massachusetts to charge someone extra for paying with a credit card."

She replied, "well, that's how it is; it's three percent extra."

Now, as I said, the receipt identified this extra charge as an "online convenience fee." When I first read that, I immediately suspected that this was really a charge for using a credit card. I thought it likely that Kelley & Ryan are well-aware of the Massacusetts law, and that they try to skirt it by pretending their credit card fee is some other kind of fee.

But the Kelley & Ryan employee made it clear--explicitly confirming to me that this was in fact an additional charge because I chose to pay with a credit card.

The law does allow a vendor to offer discounts for paying by check or with cash. I attempted to give Kelley & Ryan an out, and I asked the employee, "okay, well is there any way I can get a discount then?"

Not surprisingly, she answered me with a scornful tone. "No! No discounts!"

That about wrapped it up for me. Kelley & Ryan have an exclusive contract to collect government taxes from millions of residents of the Commonwealth, and they are illegally increasing the burden on the taxpayer by 3% for the (I'm guessing) millions of online transactions!

This stuff just infuriates me. It is wrong. It is corrupt. It is theft.

And it is just one more example of how American citizens are nickle-and-dimed by both private companies and public entities to drip 90% of them of every bit of available funds they have.

Companies like Kelley & Ryan profit at the public trough--illegally charging individual taxpayers, and I'll bet cumulatively overcharging the Commonwealth, to perform a service that could, and probably should, be kept in-house by the state.

Why should a private, for-profit company be allowed to collect taxes for the state? That they "enhance" whatever profit they already make through the terms of their contract, by illegally passing on their processing fees to the taxpayer, simply rubs copious amounts of salt where the Commonwealth is already hemorrhaging its treasure to outside vendors.

Imagine the outrage the Chamber of Commerce would express if the Commonwealth announced it was going to increase some tax by 3%. Why, the Chamber just poured all kinds of money into defeating the alcohol sales tax increase in Massachusetts by ballot initiative at last week's election. They wouldn't be able to stop quoting how many jobs would be eliminated by a 3% increase on whatever, and how many businesses would suffer.

Yet not a peep when a huge increase is levied by a private, for-profit company on a public tax obligation!

This blog post is the first step in my attempt to right this wrong--to recoup my 3%, as well as all the three percents that have illegally been levied on my Massachusetts compatriots.

Ideas for Solving the Debt Crisis

I'm going to collect novel ideas for improving the American debt crisis--I'm talking about individual debt, and not the debt crisis of our crazy, national deficit.

First up, a reader comment I saw on the New York Times today:

"There should be a direct debt exchange for consumers based in the Department of Treasury or Fed.

Taxpayers in good standing should be able to cash in high interest debt and pay it off, over time, with their taxs at 5-10%.

It makes not sense for American taxpayers/consumers to pay into a government that subsidizes the financial industry a in a dozen different ways (750 Billion TARP, 0% loans from the Fed, access to government bonds to sell) and they have these same taxpayers/consumers borrow from the financial industry at 20-30%.

And then allow fraudsters like the one's described in the article, take another bite out of these consumer/taxpayers.

Set up the direct lending program today. Make it directly accessible or accessible through credit unions which traditionally don't overcharge their customers."

~jo, on the Pacific coast (June 19th, 2010)

A recent adjustment to last year's credit card-regulating legislation has limited the amount of any fee that a credit card issuer can charge the credit card account holder. For example, a fee cannot exceed the amount of an "infraction." So, if you go over your credit card limit by $2.49, your credit card company cannot charge you a $39 fee. They can only charge you a $2.49 fee. And as I understand it, no fee can be greater than $25, but if the customer is a "repeat offender," they may lose some of these protections.

Based on these new rules, here's a 2-part idea of my own:

1. Limit the amount that banks can charge for each incidence of overdraft. If you overdraw your checking account by $10, and those ten dollars represent 3 very small purchases, the bank cannot charge you about $40 per overdraft ($120 in fees for your $10 mistake, which is what my bank, Citizens Bank, does). Instead, regulate in the same way the credit cards are now regulated--limit the fee to no more than the amount of the overdraft ($10 in this example), and cap fees at a reasonable maximum, like $30, or something.

2. Give customers the choice of whether they want their daily transactions to post in order from smallest to largest, or from largest to smallest. This is a small thing that Citizens Bank, and probably other banks as well, do to squeeze as much money as possible out of customers who are really struggling.

Here's an example that illustrates why I want these changes. There was a week during which I made a math error in balancing my checkbook. It was an honest mistake, and it resulted in my thinking I had about a hundred bucks more than I did.

I wrote my rent check, and on the night it posted, there were also about 8 tiny purchases that posted, averaging about $2 each (coffees). The total amount posting was approximately $1,600, and the available balance was, due to my error, approximately $1,500.

Citizens Bank could have cleared all 8 small purchases and overdrawn my account with the 9th purchase--the rent check for $1,575 (by the way, here in Boston, that's not a lot). It would be very easy to run the system in a pro-customer way, as I'm describing. But then Citizen's Bank wouldn't be able to wring every possible cent out of me.

What Citizens actually did was post the rent check first--the largest item--so that it immediately overdrew the account. Then all other 8 items posted as overdrawn, too. My account was approximately negative $100.

I could have remedied this the next day with the cash in my purse, but then Citizens Bank assessed its tremendous fees: $39 for each of the 9 items. $351. Plus the $100 error I'd made, my account was then overdrawn by $451, mostly because of an honest mistake I'd made, and subsequent purchases to the tune of $30 (the 8 tiny purchases responsible for almost all the fees).

Do you think that I was able to come up with $451 before the automated bills set to debit from my account (electric bill, phone bill, student loan etc.) posted? Of course I was not. (Another customer might have then been sucked into payday lending, but at least I did not go down that horrible path). However, I accumulated more fees and more overdrawn items before I finally got my next paycheck, every penny of which was necessary to pay off Citizens Bank's fees, leaving me with no money for food or gas for another 2 weeks, and sinking farther into a hole because of one, tiny honest error. Citizens Bank counts on this. They want this to happen to their customers.

If they wanted it not to happen to their customers, they wouldn't charge $451 for $30 in mistaken over-spending. They would make changes to the way they assess fees, and they would be willing to listen when customers call their customer service line, as I did, to ask for mercy and forgiven fees in an instance like mine. But they are implacable. They truly do not care.

I firmly believe that if there is an afterlife, there is a special place reserved for the people who dream up and implement predatory an abusive structures like the fee scheme at Citizen's Bank. But consumers need and deserve some protections and justice in the here and now.

Why not offer bank customers the same protections from this kind of predatory behavior that are currently being extended to credit customers?

Here's another idea of my own:

If a delinquent credit card debt is sold to a debt collection agency for pennies on the dollar, limit the amount of debt that the collector can attempt to collect to the actual outstanding debt due to purchases and regular instance.

Here's why:

A majority of delinquent credit card debt is on accounts that had predatory credit terms to begin with. Many of these accounts had credit limits as low as $300, but balances of $550 or $700 or in some cases even over $1,000.

This is what I call "invented debt." The vast majority of the debt is just fees--fees that may not even be legal to impose under current laws. During the time the account was active, the account holder might have purchased a grand total of, let's say, $500 worth of stuff, and paid a total of $800 to the credit card company. But due to the card's predatory and deceptive terms, the account is constantly accruing fees that push it farther and farther over the limit.

Eventually, the downtrodden account holder gives up, and the account is sold to a collector as bad debt.

In reality, the account holder has probably paid for every physical purchase made on the credit card, as well as considerable fees and interest. Still, the account holder is left with this "invented debt" of hundreds and hundreds of dollars.

It seems unreasonable that a third-party debt collector, who does not even represent the original credit card issuer, can purchase an invented debt of $500 for the paltry sum of perhaps $20, then tack on $200 more in "administrative" fees, and begin to put the account holder through hell for an invented debt of $700 when in reality, the account holder has actually paid for all his physical purchases, and the collector has never been harmed or damaged by the account holder, and in fact has only even laid out $20 to gain control of this "debt."

The collector will now relentlessly pursue the account holder for this money, and will quickly move to the civil court system to force collection. The courts are clogged absolutely to the gills with these cases, which are an intolerable, and unjustified strain on the public justice system.

If you doubt this, drop by your local court and witness the collection companies actually doing business from tables in the courthouse lobbies and hallways, with long lines of "invented debtors" missing work and forking over their household's grocery money to avoid going to trial. What misery! What misuse of the American court system. How unconscionable that this abuse persists!

As I've said before, these financial predators are living examples of the ancient Biblical text:

"And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God."

Matthew 19:24

But Americans need justice against these people during this lifetime.

Here's one more idea. It's a riff on the New York Times reader's comment at the top of this page. Instead of using the federal government, you do the same thing privately.

What would be really amazing is if a non-profit organization could be formed that would buy up these bad debt bundles, and then instead of doing what the collectors do, simply contact the debtor and give them the chance to "buy back" their debt for whatever the non-profit paid for it, plus something nominal, like 1%, to fund the organization. Or you could even do a 10% fee and use the return to fund additional pro-consumer financial programs.

**************November 18, 2010**************

Here's another idea:

Immediately allow all persons receiving federal or state unemployment compensation to use this compensation in order to start a business.

Allow these entrepreneurs to make sales and grow their new businesses without risk of losing their compensation. Allow compensation claims to run their usual course. Neither impose early terminations, nor allot special extensions.

This is already legal under federal law, but must be approved or implemented on a per-state basis.

Despite our tattered economy, and the number of fabulously qualified and motivated Americans collecting unemployment and unable to find a decent job, only a handful of states (Delaware, Maine, New Jersey, New York, Oregon and Pennsylvania) are bothering to move in any direction toward programs like these.

What on earth have we got to lose? It's like the state has some vested interest in making sure nobody brings in more than $500 per week after losing a job, and if they do, then we're darned well going to stick it to them! Are we crazy?

Here we have tens of thousands of people who are prepared to create a job for themselves--some of whom will become successful enough to create jobs for others--all at a small fraction of the price that a typical small business pan would be looking for in a start-up bank loan (from all those fat-on-taxpayer-money, non-lending banks, right?).

These entrepreneurs are willing to bootstrap everything, work 18-hours a day, bend over backwards and then some, and generally work harder than they ever have in their lives (as every small business owner knows is true) to lift their little piece of dream off the ground.

And they can do it with the money they're already eligible to receive under unemployment compensation law, if states will just wake up and get with the program.

I'll continue to post more ideas as I come across them.