I have run into this kind of automated bureaucracy several times in the last decade. It is both infuriating and frightening.
My mortgage was sold to a new company that had a weird computer-directed policy that rejected my home owner's insurance. They then flagged me as not having insurance and charged me over $1,000 for providing insurance. I spent hours on the phone speaking with people in India who absolutely would not send my proof of insurance up the chain of command. It wasn't until I was able to find the CEO of the mortgage company and contact her directly to explain my situation that it was finally resolved... for six months when the automated system rejected my home owners insurance again. I eventually had to refinance the home to get out from under this soulless company's grip.
Institutions like the Better Business Bureau used to protect consumers from this kind of abuse, but the complaints I have registered with them have achieved nothing. If I was poor, this situation would have financially ruined me. I would have missed mortgage payments, my home would have been foreclosed on, and my credit would have been ruined for years.
I highly recommend the science fiction film "Brazil" to anyone who wants to see the dystopia this kind of automated rules-enforcement could create. "Brazil" is the book "Nineteen Eighty-Four" but the totalitarian government rules with a system of overwhelming bureaucracy. The problem here is that it is the Capitalists who are the oppressors.
Yes, the fact that you're already upset, combined with seemingly no ability to resolve the situation is incredibly infuriating.
I guess the side benefit of today's age is that it's not too difficult to find people high up in the company to contact. I usually do these things to resolve issues that can't be resolved through support systems:
1) Search LinkedIn for higher ups in the company who could help
2) Search Google to try and find the email format the company uses for it's company email... e.g. first.last@company.com or flast@company.com
3) Write a clear and concise account of the problem and either include every executive you find or BCC them all
I had an issue with Babies R Us where they shipped me a piece of furniture that was destroyed at some point in the logistics process. I contacted support about it and they kept wanting to charge me return shipping fees and told me to take it to a B&M store to avoid that. So I took it to a local store and they said they couldn't process the return but would ship the item back for me and that I needed to contact the phone support to update them on the situation. I did that and phone support had no ability to sort things out with the store. At that point it had been nearly two weeks and I was charged the money but no longer had the item, as I had left it at the store. I began the charge back process but executed my tactics above and got multiple executive responses by the end of the day.
I've done this with multiple companies in the past and it has ALWAYS worked. It sucks that this is what you have to do but at least it's an option.
That's an excellent way to go about it. Also similar, and effective, is to write a formal letter on actual paper, outlining the issue clearly, and send it Fedex overnight to the executive in question. That'll usually get some kind of response. Sending it to the attention of the General Counsel of the company can be particularly effective, since it can generate the kind of attention that an attorney letter would get, even though you haven't had to pay an attorney.
This also reminds me of a talk by Maxim Februari at the most recent TEDx Amsterdam[0]. From the description:
The infrastructure of connected things [..] imposes norms on citizens. Not in the form of written laws: the norms are hidden in the design of things. Citizens can’t protest the new laws, or change them, because they do not know them. And because decisions are made automatically, the laws can’t even be violated [..]
The BBB does nothing. It's just the Yelp of the past. They don't help mediate disputes they just extort business owners. If the owner pays enough money they can get rid of negative reviews. It's crap.
The only thing that will do you any good against a company like that is hiring a lawyer and it sounds like you should have done that in the first month.
The cost of a lawyer was more than the amount of money under dispute. It may have felt good to take the company to court and win, but the cost of representation plus the leave time I would have had to burn to spend time in court and satisfy all the discovery paperwork requests would have cost much much more than what the company was charging me. How does it make sense to spend so much time and money over such a small claim?
And what about people who can't afford lawyers? Why does any American citizen have to spend exorbitant amounts of time and money disputing something that should be resolvable with a phone call?
You said you were charged over $1,000 and that this went on for six months. All it likely would have taken is a letter from a lawyer. The cost of having a lawyer send a letter isn't that much unless you're only considering super expensive lawyers.
If one can't afford a lawyer, the state should provide one. Is this not how it works? Please correct me if I'm wrong.
I have a professor who's also a lawyer, and he said something that resonated with me: "The law isn't about what's convenient [or profitable], it's about what's right." People who have been wronged can take things far beyond what would be "reasonable".
The mere presence of a lawyer changes every interaction you have with any institution. It makes ignoring you a far more risky endeavor.
In actuality, the state will only provide you a lawyer to defend you in a criminal case, and then only certain criminal cases (I think in Missouri it is cases where the penalty is normally jail time, not cases where they normally only fine you, like traffic ticket). Even then, state provided legal defense is usually horrendous- public defenders are very over worked and simply don't have the time to help their clients.
There should be legal counsel available, and it should be a lot easier to navigate the system; but unfortunate in the US (and probably most other countries) that is simply not the reality.
In the U.S., there is no right to a lawyer for any civil case, and for that matter not even in a criminal case. You have to be both destitute and a criminal defendant to receive a court-appointed lawyer.
Many people believe that all criminal defendants are entitled to a lawyer at government expense, but in fact they are not. Unless you are indigent, you'll be required to hire a lawyer yourself or do without.
More accurately it's the Yelp of a generation. I work for a 100+ year old charity that is trying to modernize while not abandoning it's constituent base which is primarily seniors at this point. There's a weird internal schism going on because we're trying to appeal to the younger generation but we have to keep one foot in the past and maintain crap like our BBB rating because our base demands it.
As the Greatest Generation dies off, I think so too will old institutions like the BBB but for businesses that cater to that generation they're still relevant.
Sorry to hear that. I want to add a side note on this for people considering a mortgage. We never think about the fact that your mortgage could be sold to another company when going for a mortgage. So unless you get the mortgage from one of the big guns like wells fargo etc, there is a good chance that the "smaller" mortgage firm that gave you a great rate will repackage your mortgage and wash their hands off it. This can throw things off for you as you are left to deal with a new company who can impose their shitty policies on you and you didn't even choose them.
That's not necessarily accurate. The smaller mortgage BROKERS will likely sell your loan to the highest bidder. If you go with a small town bank, they're often self-funding the loans and won't ever sell them off (which is exactly why I went with a small-town bank). Every small bank I've ever dealt with was extremely easy to work with and up-front about whether or not they'll sell the loan.
I wouldn't count on this. My wife and I got a mortgage through our local bank which has two branches, both in towns under 40,000 people, and the loan was sold to Fanny Mae and their ilk before the ink had dried on the closing papers.
They were up front about it, which I appreciated, but it goes to show that using a small town bank does not guarantee your loan will stay local.
>If you go with a small town bank, they're often self-funding the loans and won't ever sell them off (which is exactly why I went with a small-town bank).
I think a lot of small banks have quit writing mortgages, rather than deal with the Dodd-Frank rules.
How exactly does this work? You have a contract with company X. Company X sells your payments to company Y. Your payments per the contract should still be going to company X unless the contract stipulates otherwise - that they can have you do the payment forwarding for them. Neither company can alter the contract you signed; that's not how contacts work. Any policy that is material to your mortgage should be in the contract. So what kind of shitty things can company Y do?
Yep, and pretty much every mortgage I've had (or seen - I worked at a mortgage company for a while) included this language, and was pretty up front about it. I've never seen terms change (like prepayment penalties, etc), but who you send payments to can change.
ONE time, I had a mortgage sold to another servicer, and that servicer had "each electronic payment requires a $3 fee". THAT one ticked me off. Yes, I can still send paper checks, which are subject to getting 'lost' or 'delayed', but electronic xfer? $3. I did not sign up for that, but have no choice about who services this loan. :/ (refinanced and left - that's about the only recourse you have, and it often involves hefty fees as well)
This is the frustrating part to me. I bought a house with a broker I used a lot (flipped abused houses for a few years). He sold the loan to company A, which was great. They sold the loan to company B after a year, and the nightmare started.
One month, they withdrew my mortgage twice on the same day (found out when my debit card declined at the grocery store).
They sent a mortgage interest statement in January. I filled out my taxes, then after I had gotten my refund, they sent a corrected mortgage interest statement. I had to make a judgement call on whether this required re-filing taxes and the expense that entailed.
The worst was when we got a $2500 check from the mortgage company, saying they had recalculated our escrow, and they had overestimated it initially. We spent most of that money on setting up a nursery for a new baby. Two months later, we received another letter saying, "whoops, our bad, we actually did have escrow calculated correctly the first time. Pay us $2500 in 30 days or your house note is going up by $200 a month until escrow is funded again".
EDIT: Recalled another issue with this company. I'd get e-mails monthly: "You're late on your payment. We're about to foreclose on your house". This would be followed by an e-mail: "Our computer system is being upgraded. Please disregard late payment e-mails if you've paid your mortgage. We should have this fixed within three months".
yay.... ugh, horrible. would love for someone to 'disrupt' the mortgage industry, specifically servicing. I don't particularly care about the upfront stuff - you only go through that once, but you live with a servicer for years, you have little or no control, and it's generally crappy.
I refuse to let others handle my escrow, and pay taxes myself. I've had companies 'miss' tax payments, or pay the wrong amount, and I'm still stuck holding the bag, and potentially losing my house, but I didn't have the money to cover it - the mortgage servicer did.
The Better Business Bureau is not a US govt organization. It's a 501c3. They only provide moderation to businesses that subscribe to them ($€£¥) and even then its non binding. BBB is a decades old joke.
Glad you mentioned Brazil. Was thinking the same thing as I was reading the first part of your comment.
I mentioned it below, but the Federal Government's Consumer Financial Protection Bureau, the CFPB, has been very helpful to me in the past with PayPal.
http://www.consumerfinance.gov/
Also, depending on the problem, a complaint to the Federal Government's Consumer Financial Protection Bureau, the CFPB, can be highly influential. I had an issue with PayPal and got a direct response from the CFO who cleared up the issue.
http://www.consumerfinance.gov/
My mortgage was sold to a new company that had a weird computer-directed policy that rejected my home owner's insurance. They then flagged me as not having insurance and charged me over $1,000 for providing insurance. I spent hours on the phone speaking with people in India who absolutely would not send my proof of insurance up the chain of command. It wasn't until I was able to find the CEO of the mortgage company and contact her directly to explain my situation that it was finally resolved... for six months when the automated system rejected my home owners insurance again. I eventually had to refinance the home to get out from under this soulless company's grip.
Institutions like the Better Business Bureau used to protect consumers from this kind of abuse, but the complaints I have registered with them have achieved nothing. If I was poor, this situation would have financially ruined me. I would have missed mortgage payments, my home would have been foreclosed on, and my credit would have been ruined for years.
I highly recommend the science fiction film "Brazil" to anyone who wants to see the dystopia this kind of automated rules-enforcement could create. "Brazil" is the book "Nineteen Eighty-Four" but the totalitarian government rules with a system of overwhelming bureaucracy. The problem here is that it is the Capitalists who are the oppressors.