No reply: What to do when the corporate office won't respond to your complaint

This happened once before

When I cam to your door

No reply

They said it wasn't you

But I saw you peep through your window

                                                                                                                        The Beatles 

Have you ever tried to resolve a dispute with a corporate entity: a bank, a car rental agency, a credit card company? How did it turn out? Most times--I'm guessing--you just gave up without getting your problem solved.

A couple of years ago, Chase Bank flagged a fraudulent transfer out of my checking account.  Three thousand dollars of my money slipped into the account of a stranger through Chase's Zelle digital payment network.

Chase admitted that the transfer was unauthorized and that I was not at fault. But it refused to return my money. The word came down from on high: Once money is transferred through Zelle, it cannot be recovered.

My wife and I happened to be Chase Private Clients at the time because we had some retirement savings with Chase. Made no difference. 

I emailed the Chase broker, who was supposedly handling my money. He called me on the phone and asked me not to communicate with him by email because it could cause him problems with the SEC.

I made numerous phone calls to Chase representatives, and I spoke to a different person every time I called. No satisfaction.

Then I switched tactics. I made a phone call to the Consumer Financial Protection Bureau. To my surprise, someone answered my phone, took my complaint, and assured me that Chase would be notified that same day.

Then I filed a complaint with the Federal Banking Commission and the Louisiana Banking Commission. I also discovered I could file a lawsuit against Chase in a Louisiana small claims court. The cost? Only $25, and I could file it electronically from my home computer.

I was typing up my lawsuit when a Chase representative from "Corporate" called.  His voice sounded like James Earl Jones--in other words--the voice of God.

"Mr. Fossey," he intoned in a deep, stentorian voice,  "we are going to return your money."

We all know that big, multinational corporations have insulated themselves from their customers. You simply can't get through to someone who has the authority to fix your problem.

Here's what you need to do:

1) Be dignified. Don't curse, yell, or threaten the human-robot you talk with on the phone. 

2) Be patient and persistent and keep records of your communications.

3) File complaints with any federal or state agency with regulatory authority over the corporation that is stonewalling you.

4) As a last resort, sue the offending party in small claims court. 

I haven't actually had to file a small claims suit against a corporate entity. So far, I have gotten my disputes settled through persistence. But I think it can be a handy tool for confronting a recalcitrant corporation.

You can represent yourself in small claims court. You don't need a lawyer. And in Louisiana, you can sue a corporation doing business in the state through the Secretary of State's Office. Your state probably has a similar process for getting service on corporations.

Our soulless corporations get more greedy, more arrogant, and more indifferent to their customers with each passing day. If you get stiffed by one, you should fight back.

"Mr. Fossey, thou shall get thy money back."

 

Storino v. New York University: 1984 comes to NYU

Marc Santonocito, Ashley Storino, and Elnaz Pourasgari--all students at New York University--did some bad, bad things! 

During the summer of 2020, they attended some parties without wearing COVID masks. Oh, the horror! The horror!

All three miscreants enrolled at NYU for the 2020 fall semester, but they were soon charged with engaging in behavior that "endanger[ed] or compromise[d] the health, safety or well-being" of the university community. 

Somehow NYU obtained evidence from social media about the trio's summer activities. A New York court summarized NYU's case against them, and I warn you, it is shocking!

Each [student]was captured in at least one photo on social media depicting them unmasked and in physical contact with other individuals who were also not wearing masks: Santonocito arm in arm with other unmasked individuals, Storino cheek to cheek with other unmasked individuals, and Pourasgari touching the face of another unmasked individual.

After appearing at virtual hearings, all three students were suspended from NYU  for the 2020 fall semester.  They sued, and a New York trial court ordered NYU to re-enroll them. 

In the trial court's opinion, NYU's actions were "arbitrary, capricious, and an abuse of discretion." The trial court ruled that a university cannot impose the harsh penalty of suspension unless it gives them "clear, unambiguous and full pre-conduct notice" that their summer behavior could result in discipline.

NYU appealed, and an appellate court reversed the trial court and upheld the three students' suspension.  The appellate court ruled that the notices NYU gave the students were clear enough to put them on notice that they might be canned if they attended parties in the summer without wearing masks.

I have two problems with the appellate court's opinion:

First, I don't believe students should be suspended from their studies for attending a summer party without wearing a mask.  In my opinion, students should be free from university surveillance when they are on their summer holidays.

Second, I think NYU's penalties were too harsh. 

After all, NYU required all students to submit a negative COVID test as a condition of enrollment for the 2020 fall semester. Thus, NYU surely knew that none of the three students had contracted COVID over the summer. So why kick them out of school?

NYU is one of the most expensive universities in the world. It costs about $80,000 a year to study there. One might think its highly-paid administrators would have a decent respect for their students' privacy--at least during their summer vacations. 

The Storino case reminds me of George Orwell's 1984. In that novel, Big Brother was spying on people 24 hours a day.  Have we come to such a pass in the United States?

I acknowledge that the COVID pandemic is a serious matter. Everyone--including college students--should take precautions to prevent the spread of the coronavirus. 

But universities have a responsibility to treat their students with compassion and to enforce their student-conduct rules with moderation and restraint. In my view, NYU acted arrogantly and heartlessly when it suspended Marc Santonocito, Ashley Storino, and Elnaz Pourasgari.

References

Storino v. New York University, 193 A.D.3d 436 (N.Y. App. Div. 2021).

Millions of Americans are going to die poor: Something to talk about at the Jackson Hole Economic Symposium

 About six months ago, I received a letter from the Social Security Administration informing me that it had miscalculated the amount of my monthly Security check for the past six years. I had been overpaid, the feds said, and it would not send me any more monthly checks until it collected the entire amount the government said I owed.

Meanwhile, a Baton Rouge strip club received a Payroll Protection check for more than a million dollars. And the press reported that more than a thousand Louisiana prisoners received enhanced unemployment checks totaling $6.2 million. 

I will survive the loss of a couple of Social Security checks, but not every elderly pensioner could take the hit.  For me, this incident is just another sign that our government does not care about the elderly.  

The U.S. Department of Education, for example, garnishes the Social Security checks of thousands of elderly student-loan defaulters, driving many of them below the poverty line. Congress could pass a bill to stop this cruel practice, but apparently, it is too busy to address this outrage.

A great many Americans are entering old age with no savings, no pensions, and no assets.  These people will die poor.

And it is going to get worse. Inflation is on the rise, and inflation--it is often observed--is one way the rich rob the poor, including poor people who are elderly.

Jerome Powell and Janet Yellen assure us that the recent uptick in inflation is transitory, but that's bullshit. Our national debt is $29 trillion, and yet the government keeps printing money. The price for just about everything is going up--including food. Five bucks for a loaf of bread?

In one of his plays, Tennessee Williams observed that you can be old or you can be poor, but you can't be both. Unfortunately, that's not true. America is about to see millions of impoverished old people as inflation heats up.  

How much time did the financial fat cats spend talking about poverty at the Jackson Hole Economic Symposium last August?  I would guess not much.  After all, there aren't many poor people in Jackson Hole.

I have a suggestion for next year's economic summit meeting. Instead of holding it in Jackson Hole, book it in Anadarko, Oklahoma--my hometown.  Lot's of poor people there. 

But attendees should book their reservations early. The Budget Inn has only a limited number of rooms, and it would be unseemly for Paul Krugman, Janet Yellen, and Jerome Powell to bunk together.

Anadarko's Miller Theater: A great venue for next year's Economic Symposium

"Only pay for what you need": College students are paying for products or services they don't need

 Perhaps the most inane car insurance commercial ever aired is one by Liberty Mutual: "Only pay for what you need." 

Apparently, Liberty Mutual wants auto drivers to believe that it is the only insurance company that allows customers to buy car insurance tailored to their needs.  But doesn't every insurer do that?

Nevertheless, the slogan makes sense. No one should be forced to purchase services they don't need.  

But college students pay for things they don't want or need every time they pay their tuition bills.  That's a significant reason why tuition has gone up more than the rate of inflation for the past 25 years.

Let's take Louisiana State University, for example. A full-time undergraduate student will pay about $4,000 in tuition to attend LSU this fall. But  LSU also tacks on various required fees that bring the total cost to almost $6000. In other words, LSU's fees represent about a third of a student's total bill. 

LSU's website lists 41 separate fees that the university charges students in addition to tuition. Of course, some of these fees only apply to graduate students.  Law students and veterinary students pay fees that don't apply to undergraduates. And some of the fees are optional.

Nevertheless, required fees amount to a considerable chunk of change. All LSU's full-time undergraduates must pay a "Student Excellence Fee" and an "Academic Excellence Fee" that total $1,500 a semester.

The days are over when college tuition basically covered the cost of academic programs and a modest administrative staff. Today, universities are as large as midsize American cities.  Major universities pay a lot of money for campus police forces, medical facilities, mental health services, diversity officers, and platoons of attorneys who handle everything from sexual assault complaints to intellectual property deals.

And the students are paying for all of this--mostly with federal student loans. Surely there is a better--and cheaper--way for America to run its colleges and universities. 

Nystrand v. Kingdom of Sweden: Another underemployed lawyer seeks bankruptcy relief

A common saying when I was young (in the last century) was the old adage that lawyers are people who wish to make a lot of money but are risk-averse. 

That observation certainly rang true when I went to law school in the 1970s. I graduated from the University of Texas School of Law with a class of 500 students, and nearly all of us found decent jobs as lawyers.

Even better, my classmates and I finished law school with little or no debt. Tuition was only $500 a semester. Working part-time as a law clerk for the Texas Attorney General's Office, I avoided student loans. I started my legal career debt-free, and  I quickly found a good job practicing law.

But law school tuition has shot up dramatically since the days I went to law school. Tuition at UT's School of Law is now $36,000 for in-state students--36 times what I paid. 

And the job market for lawyers is terrible. Many people now leave law school with enormous debt and little prospect of finding employment in their field.

And this brings me to the case of Nystrand v. Kingdom of Sweden, filed last spring in a Tallahassee bankruptcy court. 

Anneli Nystrand, a Swedish immigrant, graduated from the University of Miami School of Law in 1995. In my opinion, she did everything right. 

Nystrand attended a respectable law school and paid off her student loans, although it took her 15 years. She passed the Florida bar exam and landed a job with the Florida Department of Banking and Finance, probably a pretty good gig.

Unfortunately, as the years rolled by, Ms. Nystrand's financial situation deteriorated.  In 2013-2014, approximately 18 years after graduating from law school, she was on the job market. Although she applied for more than 200 attorney positions, she did not get a single interview.

In 2016-2017, she found a law job that paid only $39,000 a year. In 2017-2018, she worked for a law firm and made $50,000 a year.

In 2019--more than 20 years after graduating from law school-- Ms. Nystrand began accepting court-assigned cases for a flat fee. If she took a juvenile delinquency client, for example, she only received $377, which is less than the hourly rate of a corporate lawyer in a top-flight firm. 

Her total income for 2019 was only $20,000. In 2020, Nystrand did a little better, earning $46,000 before deducting expenses.

In April of this year, Ms. Nystrand filed an adversary complaint in a Florida bankruptcy court against the Kingdom of Sweden, seeking to discharge student loans owed to that Scandanavian country.

I have no idea what that is about. Nystrand's complaint does not state the amount of the debt or how it was incurred.  

Nevertheless, I am on Ms. Nystrand's side. I hope she is successful in clearing her debt to Sweden.  

Anneli Nystrand is one among hundreds of thousands of underemployed or unemployed attorneys who left law school with enormous debt. Now they are trying to build their careers in a soft job market--particularly for lawyers who attended second- or third-tier law schools. 

Florida has 11 law schools--far too many. Ms. Nystrand is forced to compete in a job market for attorneys saturated with people looking for work. 

All these unemployed or underemployed lawyers deserve reasonable access to bankruptcy courts. Senators Durbin and Cornyn's bill would allow distressed student-loan debtors to get bankruptcy relief ten years after their student loans become due.

If that bill becomes law, people like Anneli Nyastrand would immediately benefit.

But one more thing needs to be done. The American Bar Association, which allegedly regulates legal education, needs to get off its ass and close down some law schools. 

References

Nystrand v. Kingdom of Sweden, Case No. 21-400006-KKS (Bankr. N.D. Fla. Apr. 16, 2021 (adversary complaint).

 

Department of Education pauses collection efforts against student-loan debtors: Guaranty agencies garnish wages anyway

In response to the COVID pandemic, the Department of Education allowed student-loan debtors to skip their monthly loan payments without penalty until September 30, 2021.  That pause was recently extended to January 30, 2022. 

Thanks to the Department's forbearance, millions of college-loan borrowers are enjoying a respite from making loan payments, knowing that DOE will not charge interest and penalties during this grace period and that their wages will not be garnished due to nonpayment. 

But guess what? Loan guaranty agencies continued garnishing the wages of student-loan borrowers despite the federal moratorium.  According to the Student Borrower Protection Center, the guarantee agencies garnished $27.2 million in May 2021 and $12.9 million in June 2021.

Will student borrowers recover these lost wages? Probably. But it will probably take a long time. After all, the Department of Education didn't forgive all student loans taken out by people who were defrauded by ITT Tech until five years after the for-profit college filed for bankruptcy.

The federal student loan program has enormous problems, and some of them will be difficult to fix. But surely, the Department of Education can require the loan guarantee agencies to abide by Department policy and the law.

But apparently, the guaranty agencies think they are above the law. In 2016, Educational Credit Management was assessed punitive damages for repeatedly garnishing the wages of a bankrupt student debtor in violation of the Bankruptcy Code. 

In an earlier case, ECMC was sanctioned for violating the Bankruptcy Code by collecting on a debt discharged in bankruptcy. 

Perhaps, you might conclude, the guaranty agencies inadvertently violate the law because they don't have the financial resources they need to keep track of their legal obligations. But that conclusion would be incorrect. According to a report issued by the New Century Foundation in 2016, Educational Credit Management, a nonprofit corporation, had more than $1 billion in nonrestricted assets.

Congress has a lot to do to clean up the student-loan mess, but it might start by holding hearings to examine the practices of the guaranty agencies.  Congress might begin by asking why some of the guaranty agencies are so rich. It might also inquire into the agencies' attorney fees the agencies run up chasing distressed student-loan debtors into the bankruptcy courts. 

Finally, Congress might look into how much the guaranty agencies are paying their senior management.  More than ten years ago, Bloomberg reported that the current CEO of ECMC was making more than $1 million a year.  What do you think ECMC's current CEO makes?  My guess--somewhere in the high seven figures. 

We don't need no stinkin' pause on student-loan collections.

"If I knew then what I know now, I probably would have skipped college": Freshman enrollment is down 13 percent at 4-year schools

Freshman enrollment dropped an astonishing 13 percent last year, and overall college enrollment sank 4 percent. 

What accounts for this exodus? The COVID pandemic partly explains it. Colleges switched from classroom teaching to online instruction in the spring of 2020, which was decidedly inferior. Undoubtedly, many students have decided not to go back to college until the professors resume teaching face-to-face.

But COVID is only a partial explanation for the student-enrollment downturn.  Cost is a huge factor. It now costs about $75,000 a year (including room and board) to attend a private liberal arts college--$300,000 to get a four-year degree.

Private schools have slashed freshman tuition by more than 50 percent to lure new students through the door, and almost all first-year private-college students now get some sort of discount.  

But for most schools, that strategy has not been successful. Enrollments continue to drop.

But there is a third factor that helps explain plummeting college enrollment.  Students have figured out that a four-year college degree is no guarantee of a good job--particularly a degree in liberal arts or the social sciences.

Many employers no longer require new employees to have a college degree, including Apple, Google, IBM, and Bank of America. Young people have discovered that a vocational-school certificate may lead to a better job than a four-year degree in gender studies.

For example, CNBC carried a story about a young person who left college to enroll in a 14-week coding boot camp, "If I knew then what I know now," the former college student explained, "I probably would have skipped college."

As a guy who spent 25 years as a college professor in the higher-education gulag, I'm glad to see college enrollment declining.  Too many students ruin their lives by taking out student loans to get vacuous college degrees from institutions that don't teach students to think or solve problems. 

Colleges have hired market firms and "enrollment management" administrators to attract warm bodies back into the classroom. But young people are beginning to wise up. Small liberal arts colleges, in particular, are struggling to survive as their student enrollment shrinks.

More and more young Americans have come to realize they can have a good life without going to college. Unfortunately, some college students don't figure that out until they have destroyed their financial future by taking out too many college loans.

LSU students in a crowded classroom: Ain't we got fun!