Draft

Just who do you think Citibank is targeting with dunning notices?

Draft of 2008.02.27 ☛ 2015.03.17

My Mom is 84 years old, lives with us. She’s financially secure, to the point where we try furiously to make enough charitable donations at the end of the year to make a dent in her taxes. This year we used her Citibank credit card to make most of those donations.

When I paid the bill a few weeks back, the check apparently disappeared in the mail. Four (4) days after the bill was due, they started calling.

Five times in the last week, somebody stern from Citi Card Services has called to talk with my 84-year-old Mom about her overdue account. When will she pay it? Will she pay it online? Why won’t she take the few minutes to set up an online banking account and pay it online? Well OK, has she already sent the check? What was the check number? In what amount? Do you know there will be serious consequences if payment is not received?

Yeah—there surely will. You, my dear Citi Card Services person, will inadvertently disclose something that the screen of “customer privacy” no doubt hides quite handily from the inquisitive public: The same exact actuarial risk analysis algorithms used to determine who is a good or poor candidate for credit cards? Those can be used to determine who will panic and send duplicate funds, overpay their bills, get dropped off the customer rolls, get purged.

Not only could one predict with some certainty who is a good or bad risk as a continuing client. One could also predict—and perhaps with better accuracy, given internal historical records—which customer resources you can burn to balance the books. You don’t want to irritate those twenty-something overspenders; you want to kick out the little old ladies who pay their bills down to zero, the folks with “good” credit records. Kick ‘em off the lists, and move onto the big spenders.

But you know, from out here in the consumer side of things, I have to wonder how the public might perceive that. Most little old ladies, my Mom included, maintain one credit card so they have any credit rating at all. Something bad happens to it, and she’s out of luck. All permanent record negative consequences that a young twenty-something spendthrift is buffered from by juggling accounts and rolling them over? Your typical retiree widow will have no protection against.

I’m not sure how the public might perceive that at all.