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Is this a good time to reveal credit card terms?

Citi just sent us one of those ominous plain envelopes from South Dakota, and (as I expected) inside is a Notice of Change in Terms and Right to Opt Out. They’d like to move this particular card from Prime + 4.99% to Prime + 8.99%.

The interesting thing to me is that we pay down our cards regularly and substantively, but (entrepreneurship being what it is these days) do maintain a balance. So I’m going to assume, based on the little I know about financial actuarial practice and business analytics, they’re reaching into their customer base and targeting those who they gauge willing to pay the increase and unwilling to bail out of the program entirely. The suckers, in other words.

I suspect, though I have no evidence on hand, that they may even be ameliorating rates for those in serious financial difficulties, since defaulting on credit cards (no matter what Congress does to change the bankruptcy laws) doesn’t give CitiFail any more money when you get right down to pocketbook accounting, or operating capital. And I bet they’re intentionally pissing off, or dropping outright, people (like my Mom) who are long-standing customers who pay down their balances immediately.

Intellectually, I don’t envy them. The times, and the crisis, are setting them against us. And if they make any wrong moves in the course of their collapse, they will not merely fail financially but end up being rendered in cartoons as big fat men with tophats and pocket watches. The only thing they can do (from their standpoint) is try to get what they can, trim the fat, and harvest the rest.

I find myself wondering if maybe, just possibly, there is an opportunity here to… well, the phrase coming to mind is “reverse the predator–prey relationship”. That’s pretty optimistic. “Level the playing field a bit” might be the more measured phrase. “Enable a collective defense” might be even better.

A transparency play.

I know that companies like Wesabe already aggregate (but keep private) credit account information. Not just how much money people owe, but I assume also information on Terms of Service and interest rates and suchlike.

What I’m imagining this afternoon is an anonymized but public aggregation of “everybody’s” terms of service, with a deep-ranging analytic system wrapped around it. How many people in your county have got better Terms? How many card contract structures are there, actually? What can we infer about Card Company X’s actuarial ruleset from the data on 100000 people’s contracts? What can those people do, looking at one another’s contracts, to identify opportunities to improve the “product” they are offered?

For example, when I called Inisha at Citi just now to bitch about these changes, she was (a) unable to tell me my Card Membership Date, (b) able to tell me that my Terms of Service cannot be seen online at all, anywhere, (c) able to put me on hold and propose a compromise interest rate somewhere closer to my original, without obviously working up a sweat. The implication to me is that this amounts to intentional obfuscation and hiding of crucial information, coupled with a big set of simple contingent reactions to protest. I have to assume that Citi keeps it hard to find anything out about the complex state of one’s terms specifically so that their representatives can offer a pig-in-a-poke incomparable alternative when challenged.

So I’d copy over my contract information somewhere, and even be willing to reveal limited balance data, if I was confident of its anonymity and knew that it was useful to reveal patterns in Citi’s (and others’) business practices and sales offer strategy.

I bet some other folks might be willing to do that too.

son1 said,

November 24, 2008 @ 11:10 am

… this amounts to intentional obfuscation and hiding of crucial information, coupled with a big set of simple contingent reactions to protest.

This seems like a good description of a lot of things, actually — not just credit card company customer service practices.

In all seriousness: maybe you’d be willing muse, separately, on what an acceptable level of anonymity would be. Would it be enough to simply auto-assign anonymous IDs to submitters, around which data could be aggregated (this will fail to work beyond a certain point; cf. the Yahoo “anonymized” search data scandal from a few years ago). Or do you want to enforce a certain level of disaggregation in the way that the data is stored?

A better way to put it would be: assume that the thing you want to prevent is the “de-anonymization” of the data — the ability for “someone” to be able to take the data, and determine whose data went into it in the first place. Do you want the “someone” in that sentence to be anyone (anyone off the street, with no special knowledge except public knowledge)? Do you want it to include the credit card companies themselves? The administrator of the database (assuming the database only makes a subset, or an aggregate, of the available data “public”)?

What kind of anonymity are you thinking of, specifically?

Tozier said,

November 24, 2008 @ 6:28 pm

Good question.

There are a couple of answers, of course. If anybody did anything in real life, they’d need to be aware of both American and international privacy laws. In particular, European law is draconian when it comes to this sort of thing.

So past that point, we need to ensure there’s enough information to be useful for mining. I don’t really care if people know my name and how much I owe on my credit cards. I’d be happy to see daily balance information, though it would probably be more likely it’d be up to date if there were an API scraping my actual card balances (shyeah, right). I personally would be happy to enter, say, weekly balance info.

I suspect the insidious privacy problem would come if one entered merchant info, or more detailed receipt data. Pattie Maes notwithstanding, I’d rather not have targeted advertisers and search engine optimizers mining me from my own effort to mine them.

If we’re trying to recreate card providers’ subjective experience of us, I suppose that (hopefully) they don’t have access to a lot of bank info, like balances. But they would have info on credit report contents. That would raise questions of reverse-engineering, too.

So to summarize, the revelation of details wouldn’t bug me insofar as they couldn’t be used to target or discriminate me by the people whose business logic I myself am trying to glean :)

son1 said,

November 25, 2008 @ 9:43 am

I don’t know why I keep writing “Yahoo search data,” when of course I mean the AOL Search Data scandal. Maybe my brain has done a global search for “semi-competent internet company,” and replaced all occurrences of AOL with Yahoo. Out with the old, in with the new…

Ben Hyde said,

November 25, 2008 @ 9:59 am

It would be fun to engineer a scheme that made it easy for folks to submit scans of terms and conditions to a central hub. Folks need help playing these games :) .

There are existing venues where this stuff gets some attention. Shopping sites mostly. For example What I like about such places you they attract a community of people who are enjoy playing the games and assembling the catalogs .

I’d personally prefer that these things be addressed with regulation rather than clubs of talented hobbists, but we do with what we’ve got.

Tozier said,

November 25, 2008 @ 10:39 am

Factoring in the Yahoo epidemiology study vs. the Google epidemiology study.

In the end, it all averages out.

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