The complete set of plays by William Shakespeare contain 835,997 words. Of these something over 1700 were coined by the Bard himself. Whenever faced with a situation where no existing word accurately conveyed the meaning and intent he wished to impart, Shakespeare did not hesitate to create a word of his own. Quite a few of his inventions have found their way into standard English in use today.
In keeping with the spirit of Shakespeare I offer the word “scamification.” In its noun form it is meant to be defined as that condition that exists when a scam is perpetrated on its victims with such style, persistence and convincing rhetoric that it becomes an accepted operating procedure.
I contend that such scamification goes a long way toward explaining the muddle we see in our lives in general and in the current presidential nominating fiasco in particular. The candidates are all well known and quite controversial but none of the three currently remaining in the hunt can truly be said to be the problem, each is symptomatic of a greater problem.
That problem, and the catalyst for the relative success of each of these candidates in his or her own sphere of influence, is a deep and largely unfocused groundswell of anger present throughout the country.
The causes for this anger are the true enemies and, as with any conflict, you cannot engage the enemy if you do not identify him.
We have thousands of organizations, religions, ethnic groups and other subsets of our population being held up as the face of the enemy. Many of them accept this designation gladly so as to trade on the notoriety that comes with it. The common purpose all such groups and organizations share is that they serve as a focal point for anger from some section of the populace. There is something to hate and someone to blame for everyone. And as long as this divide and conquer mentality exists, the true causes of our mutual problem, this pervasive feeling that “they” are doing something to us and we are helpless to do anything about it, will remain undetected and unaddressed.
Following is a breakdown of some of the more common mordidas, the little bites we are all subjected to. Small annoyances that when piled on and added to eventually lead all of us the feeling that we are being had by a faceless enemy. Victims of “legal” scams.
If you are a typical person, living in this day and age, you have dealings with several credit lending organizations, banks, credit unions, finance companies. You will have debt, both secured and unsecured and several forms of insurance. You will spend money at many retail outlets, from the corner store to the giant mega mall. In other words, you will have financial dealings across a wide spectrum of entities set up to provide a product or service in exchange for your hard earned dollars.
How many of them actually care about us as people? A quick answer might be that they aren’t in the caring business and that would be true. But it wasn’t always so. There was a time, not so very long ago, when a bank loan officer had final say over whether or not you would receive a loan and that person would sit with you, listen to your needs, consider your application, one human being to another and make a judgment based on all the factors involved. Today that loan officer merely plugs your information into a computer, reducing you to a series of ones and zeroes, with the machine determining your worth. No one likes being dehumanized in this way.
Then there are the “payday” loans and “car title” loans. These are so over the top that they have received wide media coverage yet the industry continues to flourish and their natural prey consists of the neediest among us, those with very few alternatives. Preying on the desperate is always a path to profit.
Once upon a time your insurance agent, that guy who was the face of the company for you, would have been the point person for all your dealing with his company. Back then if you had a claim you contacted your agent and he or she would take the ball and run with it, providing you with information updates as needed and settling your claim as quickly as possible. The rationale was that you, the injured party, had suffered a traumatic event and the goal of the company was to not only see that you were made whole quickly but also to reduce unneeded stress wherever possible.
Allstate changed that business model in 1992 when they hired the giant consulting firm, McKinsey and Company to devise ways to increase profits at the expense of the policy holders. Dubbed “Good hands or Boxing Gloves,” the techniques implemented by Allstate quickly spread to nearly all other insurance providers and a “legal” scam was created.
While on the subject of insurance, let’s consider vehicle “gap” insurance. If you have a financed vehicle you probably have a gap insurance policy. The vast majority of policy holders will never use that coverage. They will pay out the terms of their loan or trade the vehicle without ever falling into the gap. I recently suffered a loss at the hands (well, bumper actually) of a drunken driver. I did not have gap insurance and his insurance company, the one admitting to the liability, was legally able to pay off only the book value of the vehicle, not the outstanding amount of the loan. This means that the extent of the covered loss I suffered was determined by the amount of insurance that I carried even though I had no culpability in the accident. This left me with nearly half the amount of the loan still outstanding, not paid by the insurer of the person who caused the accident. Legal scam or merely the redefinition of “liability” and “make whole?”
While working through the insurance claims, questions concerning the gap occurred to me. According to people I talked to in the automotive sales industry, the gap is an inevitable fact of life in car sales today. It is a function of high prices, depreciation rates and long term payment contracts. The vehicle will depreciate in value at a faster rate than your payments will reduce the principle loan amount. The gap often occurs as soon as you take possession of the car but will, in any case, manifest during the first few months of ownership. If this is true, then why doesn’t disclosure of the gap and the need for gap insurance come under The Truth in Lending Act? A simple computer algorithm could easily graph the gap and its progression throughout the term of your loan, based on amortization rates and predicted depreciation of similar makes and models.
The Truth in Lending Act was written to force sellers of major items to disclose any and all information that could influence a buying decision. I submit that seeing the gap in graphic form might cause some buyers to hesitate before signing the dotted line.
When you consider that a totally wrecked vehicle, without gap insurance, immediately converts a secured loan into an unsecured loan, you might think that the lenders would insist on such coverage. Unless such a risk is so small as to not be a factor for the lender and there is some compelling reason to not require the insurance.
The reason that gap insurance is not covered by The Truth in Lending act is because it was lobbied out of the legislation. The loop hole is that the extent of the gap need not be disclosed so long as the lender does not require the insurance to be purchased. No requirement to purchase, no need to do more than offer the coverage at the time of sale without discussing in any detail how soon the gap will appear or how large it will be. Perfectly legal.
Gap insurance is a billion dollar industry. Unlike health insurance, where the payout ratio is 85% paid out of premiums collected, gap insurance is 10% paid in losses and 90% profit. It’s no wonder the industry doesn’t want to discuss this coverage at any great length.
Another area in which your pocket is being picked is in auto parts. Take as an example the wheel bearing. Back in the day it was a simple circle of steel which contained a set of little steel balls. Packed with grease, this device was fitted to the center of a wheel and rode on a spindle or hub, allowing the wheel to turn freely. Today the wheel bearing is typically part of a “patented sub-assembly” rather than a stand alone item.
This particular patented sub-assembly is a more complicated arrangement designed to do basically the same job as the simple wheel bearing but at a much greater cost. By creating patented sub-assemblies the vehicle manufacturer is able to limit or otherwise control after market parts being made for its vehicles. This eliminates competition and drives up prices. As an example, my 1985 GMC truck has an engine mounted fuel pump. Cost $15.00 and it is held in place by two bolts. Two years ago I had to replace the fuel pump on my 2012 Nissan. Off the shelf price, $735.00. We tried two less expensive after market “compatible” pumps but neither of them worked.
If you lease a vehicle or trade vehicles while they are still under warranty then this auto parts “legal” scam will not affect you. It hits hardest those who can least afford it, the guy who buys cars a few years old, no warranty and high mileage.
The companies that have issued unsecured credit to you would like nothing more than for you to max out your limit and then make minimum payments into perpetuity. That model provides maximum profit for minimum effort. But they don’t stop there. Each of them has someone on staff whose function it is to find ways to increase profits from the current client base by creative use of the fine print in the lending contract. Increased interest rates based on problems you might have with a totally different, non-associated lender, is just one “legal” scam you will encounter here. Have a dispute with lender “A” and lenders “B” through “Z” can, and often do raise your rates.
Have you read your phone bill lately? In the pre-computer era your phone bill would have had two divisions of charges, local base rate and long distance, broken down by time and charges. Those two figures would be totaled and that would be your bill. A recent ATT bill for my home service contained 32 separate charge categories, most below $1.00 and all extremely obscure in terminology.
I work as a subcontractor. My paycheck is drawn on the personal account of the contractor I work under. My bank, as a “courtesy” to me, will immediately credit half the amount upon deposit and hold the other half until the check clears. The kicker: The check I’m depositing is drawn on the same bank yet they claim it takes a couple days for it to clear. Obviously they are working the float, gaining unearned income at the expense of my liquidity. Legal, yes. Scam, you be the judge.
And then there is the food industry. What did you actually have for lunch today? With all the additives and genetically modified products on the shelves today I don’t think any of us can accurately answer that question. Read the ingredients on any packaged food container and ask yourself: How many of those chemicals listed can I identify and do I understand the long term effect they will have on my body? We cannot avoid this uncertainty unless we are involved in every phase of food production for that which we eat but we also cannot help feeling uneasy when faced with helplessness in so vital a part of our existence.
This list could go on and on and you could probably add many categories that I haven’t even thought of. The point is that we all know we are being had by the system. It’s similar to the Death of a Thousand Cuts. This enemy has no face but we feel a need to point the finger at someone. The most convenient target is that nebulous entity “The Establishment.” After all, they’re in charge, shouldn’t they do something?
Mr. Trump says that he’ll bring back the jobs and thereby solve most of our problems. Bernie says that he will take care of you and me personally so we won’t need jobs and Hillary says, “elect me, it’s my turn.” But it matters little who wins the election, none of them has the answer for what really ails the country, this undercurrent of anger engendered by the feeling that we are all being had on a daily basis. Through it all, the legal scams will continue and grow.
The answer lies with you, with me, with all of us and it’s at the grass roots level. We must educate ourselves, learn what is going on behind the scenes, where and why the “legal” scams exist. Talk to as many of those in your circle of friends, family and acquaintances as you can and get their opinions of what we can do to reduce, if not eliminate some of these “legal” scams.
Choose your personal favorite “legal” scam and write to your state legislator. Ask him or her why such borderline shady deals can’t brought into the light of day, exposed for what they are and perhaps subjected to regulation where appropriate. You just might happen upon that one politician looking for a cause to champion.
I have already opened a dialogue with my state representative, the very competent Cecil Bell, Jr., Texas State Representative.
Perhaps part of the answer will lie in putting more teeth into the Truth in Lending Act. Or it might entail each of us becoming more discerning when giving our business to the various companies. Or maybe calling into question anything contained in a bill or statement that isn’t written in plain language and fully explained.
Directing anger toward the many straw dogs the establishment sets up to divert our attention from the myriad “legal” scams is fruitless. We aren’t paranoid, they are out to get us and that’s where the battle must be engaged.