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Colonel Ken

posted by Elizabeth Warren

Colonel Ken Allard is no whiner.  He's military tough, a firm believer in personal responsibility.  But he has been so badly treated by Bank of America that he decided to go public, here and here.  Along the way, he picked up stories from other folks about their treatment at the hands of B of A.

I like the colonel.  He has the sort of "I'll fix it myself" view of injustice that makes me root for him. But I read his story and I wonder:  how many people will be cheated, scammed, tricked, ignored and generally infuriated before someone says it is time to put some basic supervision in place.

I have been promoting a Financial Product Safety Commission, an outfit that would help level the playing field between big financial institutions and customers like Colonel Ken. No manufacturer can sell you defective toaster, then turn their back on you when the toaster catches fire.  But when B of A blew off Colonel Ken, even when he could document that he was being billed for charges he did not make, there was no one to appeal to, no one to help, no one to look at the documents and tell B of A to cut it out. Sure, he might have hired a lawyer, he might have brought some kind of injunctive action in state court, and he might have prevailed in court--but that's a lot of time and money that the Colonel has to spend to clear up something that he didn't do. 

Perhaps some companies count on the fact that it is really hard for a customer to do much of anything. I think an agency that doesn't set prices, but that makes sure all terms are clear and that companies play by the rules in resolving disputes is needed.  Those are small differences that could make a big difference in the lives of millions of people.  I admire Colonel Ken for taking on a huge financial institution, but I think we need rules to make it a little easier for customers to be treated fairly.


Gee, this is getting more and more interesting with BAC as each day passes. BAC now owns THREE of the entities that I've named in a $13 million racketeering action - LaSalle Bank, Merrill Lynch Mortgage Capital and Merrill Lynch Mortgage Investors. With all of the foreclosure action in NH, MA and RI, I doubt if Harmon Law Offices will go belly up in the near future so I don't think there's much chance of BAC buying them...

Companies absolutely count on consumers not being able to easily protect themselves. I'm sure Professor Porter could rattle off the names of the same companies I'm thinking of at the moment. Many Mortgage Servicing Fraud victims have been screaming about this very problem for literally years now. The problem, at the very base of consumer protection, isn't that we don't have enough law or oversight in place. The problem is that very few, other than private attorneys, appear willing to ENFORCE it on behalf of individual consumers.

I keep harping on the Federal Trade Commission, but they're a perfect federal level example in my humble, non-legal opinion. A quick comparison of FTC v. EMC/Bear to USA/Curry v. Fairbanks alone might confirm this. The FTC will not take action on behalf of an individual consumer. I've been told that by FTC special counsel in the past.

Early on in my own battle with Fairbanks, I had approached the NH AG - who similarly did nothing to protect Fairbanks victims at the state level. Some 30 victims were shuffled off to the FTC when the AG heard about the class action. And yet, the AG was all too ready to go to bat for an individual consumer in the state when the consumer inadvertently racked up over $3,000 in long distance phone charges because they didn't realize that they were calling LD to access their AOL account.

I'm all for a Financial Product Safety Commission. But if they're going to exist, they're going to have to have the necessary man power, tools, education, technology and, most importantly AUTHORITY and AMBITION to help individual consumers because, one by one, we're being eaten alive out here - and very few people are doing anything to help us fight back.

On that note, Professor Warren, on behalf of consumers I'd like to thank you for your comments the other day at the Harvard panel on the $700 Billion "TARP" plan...

Could you please cross-post the following comment from Prof. Alan White. It concerns an intriguing alternative to the bailout. See http://pubcit.typepad.com/clpblog/2008/09/another-idea.html .

Thank you.

Tort is the alternative to regulation. I'm not anti-regulation here, but you might want to give tort a chance.

Think of UCC 4-402, which prescribes consequential (i.e., tort-like) damages for banks that wrongfully dishonor checks. This means that if a bank knows of a fraudulent check, and doesn't correct your account, it is on the hook for all the checks it subsequently bounces as a result of its failure to correct your account.

AFAIK, banks do a much better job with fraudulent checks than fraudulent credit cards. They have to pay for their sloppiness. The tort system often works, when we let it.

Not only was I a B of A victim, but B of A's predecessor caused my first round of ID theft and B of A penalized me for charges not belonging to me.
To add insult to injury, they struck out a second time causing round 2 just this summer. My losses to date are roughly in the neighborhood of $150,000 when you factor in all of the losses.
In May 2001 I was a bank employee (then Summit Bank was merging with with Fleet Bank). The police were involved, the bank took blame and that was the end of it. I never even got a statement. They closed the account and opened a new one transferring the valid balance which was paid with my expense check. The card was a business card for business use, but it was in my name and ultimately I had signed responsibility and submitted expense reports for reimbursement.
I never heard anything about it until I received a rude awakening when I needed to refinance my home to buy out the co-owner. The co-owner was only entitled to $15,000 and then I would get my quick claim deed. I was getting really unusual loan terms pitched to me that is now labeled as “predatory lending”. I wanted a fixed rate and NO ONE would quote one.
I learned in February 2004, there were well over 30 trade lines all defaulted including repossessions. There were letters dating back to 2001 to the credit reporting agencies and they were disregarded.
I have a lot of issues with the CRA’s and the fact that they claim to have lost my military ID, social security cars, drivers license, and copy of my passport. The CRA’s do not seem to be required to put their employees through any security check nor do they have to hold a government security clearance to properly maintain these government issue documents. All government agencies tell you point blank DO NOT SEND these documents in the mail, don’t carry them in your wallet or handbag. I can’t get any answers from the CRA’s why they require that information to investigate their errors. But that’s another hot topic for another day.
On the phone I was told it was a computer error and the fraud code fell off during the transition from the Fleet servers to the B of A servers. The letter I received states they instructed the CRA’s to delete the trade line as “unverifiable”.
One of the CRA’s called B of A asking if the letter was “valid” and insinuated I fraudulently created the document and proceeded to call lateral co-worker s to discuss my personal business. Fortunately I had copies of emails that B of A employees forwarded to me of these conversations from the CRA.
The trade line kept popping up, coming off, popping up again and then B of A added the fraudulent account attaching it to my checking accounts. I closed all my B of A accounts except for that new charge card at 8.9% employee locked rate.
Long story short, the office I worked in was pretty much closing down and B of A used the fraudulent account and the CRA reports as justification to not give me the promised severance package. I was not offered Cobra and insurance was cut off while undergoing medical treatment that I was forced to discontinue against medical advice.
I hired one attorney paying a $200 consult and they had a conflict of interest. I was sent to another attorney who wrote a letter to the bank requesting my severance and he told me on the phone the bank alleged I was not an employee. When I called to complain, they said it was because of my bad credit I was terminated. They did not pay my disability because I would not waive my rights under the Privacy Act. They lied to the Department of Insurance saying it was a Workers Comp case and I was paid through them. I wasn’t working and I couldn’t afford to pay the attorney a $3,000 retainer so I lost roughly $30K.
To make matters even more interesting, I had to initiate a complaint with the Labor Board to have my 401K rolled over into a qualified plan (not that it is doing well, I just didn’t trust them). I also requested my pension be rolled over into the same account. They refuse to cash out my pension and have since misappropriated the funds… another story for another day. Kiss that retirement fund goodbye.
Now here we are this summer and I get a call from the bank informing me that they detected questionable charges originating from Cypress on that “new card”. Based on that conversation, someone tried to charge $2.95 on that old closed/stolen account and they rolled it over to my new account. They also were nice enough to tell these criminals all of my current and new information.
Round 2 of ID theft and the CRA’s are already resistant to working through this. They still have fraudulent information and have re-aged information dating back to the intial.
It’s very late and past my bed time so if this sounds “rambling” chalk it up to another sleepless night trying to find a way to get the CRA’s to do the right thing. All of these crooks have had me fired from a good job where I was established and upwardly mobile, I consider them at fault for the forced sale of my home, I lost disability payments, insurance coverage, was forced to discontinue medical treatments against medical advice, was refused a loan to get back in school to finish my degree, because I could not meet the educational requirement at my current job, I lost a title change and am not paid about 20% less than folks doing the same work who were able to afford the educational requirement. My insurance rates are through the roof despite having no points/no accidents. I wanted to trade in my gas guzzler for a small economy car to save on gas but was told they will only take cash up front or accept predatory terms I just can not afford. When I needed new glasses and cataract removal was recommended I tried to get a $2,000 loan through Citibank for medical. They tried to hook me into a 30 day PAY DAY loan using my car as collateral. Needless to say, I out off surgery until I can find a job or figure out how to make more money to pay cash up front.
It’s disgusting that these corporations decide how we live, who we are, and make judgments about us.

Colonel Ken has totally misrepresented the facts in this situation. His article makes it sound as if accounts were opened using former addresses of his by someone totally unconnected to him. It also maintains he won a civil suit relating to all of this. As a journalist, I have looked into this. The fact is that the accounts were opened in 2005 with his knowledge by both himself and his then wife using their home address. Colonel Ken took no actions regarding this matter after their separation (she was paying off the cards) until, in the throes of a divorce made bitter by his actions, she simply ran out of money and the card companies contacted him. Then and only then did he cry foul. And, as to his contention that he won a civil suit in Alabama, on two occasions the courts looked at his allegations and on two occasions they declined to agree with him and ruled in favor of his now ex. All of this is verifiable -- unlike the fantasies woven by Col. Allard. It is appalling this web site would print them.

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