Filed under: Scandals, Personal finance

A feature story in BusinessWeek provides a sad commentary on the immorality of the credit card industry: Citibank was offering college students $5-10 for every one of their peers that they can talk into filling out a credit card application. The former student credit card pusher featured in the story knew nothing about consumer credit when he was signing up his friends, and currently has $13,000 worth of credit card debt of his own.

What’s wrong with this picture? Citibank was relying on an untrained salesforce being paid completely on commission: Student marketers were reportedly told by a Citibank representative that they could assuage students concerns by telling them that “It’s easy to pay off your balance once you graduate and get a great job.” Hmm. Another BusinessWeek story discusses the sad plight of a student who racked up so much debt he ended up dropping out to repay the money.

The marketers had no real training in the products they were pushing, and it’s not hard to imagine that, in their eagerness to sign up other students, they engaged in deceptive marketing practices and did a poor job of explaining what their prospects were getting into.

Of course, Citibank had to have known that this would happen, but that was the beauty of it: By recruiting students to do it, they had no knowledge of or, in theory, responsibility for the deceptive marketing: a Chinese wall had been constructed.

This is an absolute travesty, and state attorney generals need to investigate credit card marketing tactics on and around college campuses. Students are being exploited and someone should end up in jail.

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This entry was posted on Monday, September 10th, 2007 at 3:51 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.