Hard-core tactics backfire
You think so? The National Taxpayer Advocate Nina Olson has issued a report saying that the use of "hard-core" collection tactics by the IRS is backfiring.
The IRS routinely puts liens on delinquent taxpayers. The legal step damages their credit report and credit score. We all know that a low credit score can hurt people looking for a job, trying to rent an apartment, or qualify for insurance--let alone getting a loan.
Knock people down and its harder for them to pay back what they owe.
But this is really a slice of a much bigger issue: The debt collection industry is out-of-control. As a nation, starting with the Bankruptcy Reform Act of 2005 and through the Great Recession, we turned our back on the idea that people deserve a fresh start and a second chance. Instead, we're turning into a country of debt harassment and debt servitude. Not good.
Global food prices hit a record high in December. The rise in prices is a disaster for families in much of the world. Here in the U.S. it means food will pinch our budgets. Prices certainly seem poised to head higher throughout the year--and beyond.
To counter that lost revenue, banks are thinking about imposing annual fees of $25 or $30 on debit cards, according to people familiar with bank strategies. Some also considering limiting the number of debit-card transactions that a customer can make each month, these people said. Another idea circulating in the industry: Limiting the size of a purchase that a customer could make with a debit card. At the same time, reward programs for debit cards are likely to get the ax, these people say.
Here's my question: Why do business with the Big Banks anymore? The fee hikes are largely confined to the biggest banks, lumbering behemoths that got bailed out by taxpayers during the recent crisis.
I keep wondering when will money flow of the big banks and into credit unions, community banks, and community development banks, fleeing the fee-hungry Big Banks. I know I'm in a minority, but I don't believe the we-can-raise-as-many-fees-as-we-want is a sustainable business model. My guess is that two to three years from now the bigger banks will have learned that consumers won't put up with the strategy. We'll see.