Tag Archives | Business

Homeowners Foreclose On Negligent Banks

Via CNN, in areas of the United States hit hardest by foreclosure, turning the tables on banks who turn deadbeat after repossessing homes:

Since the housing bubble burst in Florida five years ago, more than 400,000 borrowers have had their homes foreclosed on by their lenders. But for some, it’s payback time.

Hundreds of homeowners and condo associations are foreclosing on banks that have failed to pay dues and other expenses on the properties they’ve repossessed. When banks foreclose on a home they become responsible for paying fees to the homeowners association — both any unpaid fees going back as far as 12 months and all expenses going forward. In many cases, however, banks are failing to pay, leaving these associations short on cash, according to Miami-based attorney Ben Solomon. Now, homeowners groups are putting liens on the properties until banks pay up and foreclosing on them if they don’t.

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Big Business Is Gaming You

Your world is being gamed, reports Nick Wingfield in the New York Times:

Congratulations. Reading the first paragraph of this article has earned you a badge.

If this made-up award makes you feel good about yourself, then you are on your way to understanding gamification, a business trend — some would say fad — that aims to infuse otherwise mundane activities with the excitement and instant feedback of video games.

Many businesses are using these game tricks to try to get people hooked on their products and services — and it is working, thanks to smartphones and the Internet.

Buying a cup of coffee? Foursquare, the social networking app that helped popularize the gamification idea, gives people virtual badges for checking in at a local cafe or restaurant.

Conserving energy? More than 75 utilities have begun using a service from a company called Opower that awards badges to customers when they reduce their energy consumption.

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Banking Giant HSBC Settles For $1.9 Billion Over Laundering Billions For Mexican Drug Cartels, Saudi Terrorists, And Iran

Is the second-largest bank on the planet also one of the most far-reaching criminal organizations? The New York Times reports:

Federal and state authorities plan to announce a record $1.9 billion settlement with HSBC on Tuesday, a major victory in the government’s broad crackdown on money laundering at banks.

The settlement with HSBC stems from accusations that the British banking giant transferred billions of dollars on behalf of sanctioned nations like Iran and enabled Mexican drug cartels to launder money through the American financial system, according to officials briefed on the matter. Prosecutors found that the bank had facilitated money laundering by cartels and had moved tainted money for Saudi Arabian banks tied to terrorist organizations.

Since January 2009, the Justice and Treasury Departments and Manhattan prosecutors have charged six foreign banks, including Credit Suisse and Barclays. In June, ING Bank reached a $619 million settlement to resolve claims that it had transferred billions of dollars in the United States for Cuba and Iran.

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American Banks’ Record-Shattering Crime Spree

The hottest new revenue flow trend in banking is simply stealing money from your customers. Via the Village Voice:

You wouldn’t know it by watching the news or reading the paper, but America’s banks are on the largest crime spree the country has ever known. Let’s go to the highlight reel, shall we?

In July, Wells Fargo paid a $175 million settlement after the feds caught its brokers systematically pushing minority customers into mortgages with higher rates and fees, even though they posed the same credit risks as whites. One study found that Wells Fargo charged Hispanics $2,000 more in what the Justice Department called a “racial surtax.” The bank docked blacks nearly $3,000 extra for their own improper pigmentation.

But despite a colossal civil rights fraud perpetrated against 30,000 customers, the settlement amounted to just .011 percent of the San Francisco bank’s annual income.

Across the country, in Minneapolis, U.S.

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On The Lucrative Careers Of Former Politicians

The New York Times on what becomes of our leaders after leaving office: they are showered with wealth by the financial industry. Don’t pity Mitt Romney, as he is likely in for a massive payday in the near future. Likewise, consider this a preview of what is in store for Barack Obama, assuming he’s careful not to piss off Wall Street too badly:

Take Tony Blair, the former British prime minister. In September, Mr. Blair was called to Claridge’s hotel in London to mediate a renegotiation of the proposed acquisition of Xstrata by Glencore, according to British news reports. Mr. Blair, who negotiated peace in Northern Ireland, put his skills to good use, apparently earning himself roughly $1 million for three hours of work.

Remember Dan Quayle? Since 2000, the former vice president has worked at the hedge fund Cerberus Capital Management, where he is now chairman of the advisory board.

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Shadow Banking Industry Now Worth $76 Trillion

Will unregulated, debt-based financial products destroy the world? Bloomberg reports that the funneling of capital into instruments of so-called “shadow banking” continues to balloon to unimaginably large proportions:

The shadow banking industry has grown to about $67 trillion, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight. The Financial Stability Board, a global financial policy group comprised of regulators and central bankers, found that shadow banking grew by $41 trillion between 2002 and 2011.

The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off-balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the FSB said.

Supervisors consider shadow banking activities to be those that allow banks to carry out business off balance sheets, as well as those which allow investors to bypass lenders and the functions they traditionally fulfill on the markets.

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A Call For Denaturalizing The Corporation

Via Policy Shop, Anthony Kammer says that if we want to take back control from corporations, we need to begin by altering how we think of them:

Given how much time we spend working for and interacting with corporations every day, it’s unsurprising that we tend to see them as a natural part of our social fabric. But corporations, of course, are not naturally occurring entities. They are the product of state laws, and they have been reshaped regularly throughout American history by courts and legislatures in order to respond to changing societal needs.

As recently as 1990, a majority of the Supreme Court explicitly acknowledged that corporations received serious economic advantages from the State and could therefore be regulated to prevent those state-conferred advantages from disrupting the political process:

State law grants corporations special advantages — such as limited liability, perpetual life, and favorable treatment of the accumulation and distribution of assets.

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Marijuana: America’s Next Big Business Boom?

Picture: R3D-3Y3 (PD)

The Daily Beast

With pot use up and legalization perceived as being just around the corner, reports that smart businessmen are looking at legalized marijuana as a smart investment:

Full dark in downtown Denver, and inside one of the twinkling high-rises that make the skyline, drug dealers are putting money into envelopes. They’re trying to be discreet. No one signed the security logbook in the lobby. All assume the room could be bugged. But if your image of the drug trade involves armed gangs or young men in parked cars, these dealers offer a surreal counterpoint. There’s a finance veteran, two children of the Ivy League, multiple lawyers, and the son of a police chief. At their side is a Pulitzer Prize–winning communications consultant, two state lobbyists, and a nationally known political operative. And the guest of honor: a state senator who likes the look of those envelopes being stuffed.

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Discover Ordered To Repay $200 Million It Stole From Cardholders

Kudos to Obama’s newly formed Consumer Financial Protection Bureau for cracking down on this. In short, Discover’s telemarketers offered customers unnecessary “add-on services” which were implied to be free, and then charged customers’ accounts for said services. In July, Capital One was forced to pay $210 million over the same practice. The Los Angeles Times reports:

More than 3.5 million Discover credit card customers will share $200 million in refunds in the wake of a federal investigation that determined the bank tricked people into signing up for payment protection plans and other add-on services. Regulators said scripts for Discover’s telemarketers “contained misleading language likely to deceive consumers about whether they were actually purchasing a product.”

Consumer advocates said the enforcement actions show that the new consumer bureau is on the job. “Banks have been doing this for years, but we never had a regulator who protected consumers before,” said Ed Mierzwinski, director of the consumer program for the U.S.

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Banks Falsify Credit Card Lawsuits in Ninety Percent of Cases?

Philip Taylor (CC)

We hear every week about the massive LIBOR interest rate fixing, or the shady practices by which banks drain money from local municipalities, or the false promises given to homeowners across the country by the finance industry, or as much as 90% of foreclosed homes remaining off the market but still shuttered in and out of dispassionate algorithms, or that San Francisco’s assessor discovered ‘errors’ in 84% of home mortgage foreclosures (read: scams). It’s not a big leap of the imagination then to consider that almost all credit card lawsuits brought by banks are fraudulent. Lenders are still continuing the dubious fraud that caused such a scandal last year with robo-signing.

via Russia Today:

US credit card companies have been churning out lawsuits and improperly collecting debt from consumers 90 percent of the time, at least according to a New York judge who deals with these cases.

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