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What Happens When Corporations Hate Their Own Customers

The current commentary explosion on social media of Chicago airport security guards forcibly pulling a man off a United Airlines plane is deeply disturbing because everyone who has flown can relate to some degree of passenger mistreatment.

Of course, we have not been pulled from our seats in a closed container by three men, but the callous, sterile, “we are only doing our jobs” attitude of the people who have most contact with passengers—stewards and stewardesses—has become a caricature of a disassociated corporations who have almost complete distain for their own customers.

It’s simple: Decades of de-regulated capitalism created airline overbookings, bank and investment company frauds, and Trump’s continued deregulation push will make consumer abuses worse.

This is prevalent in the airlines industry, as the current online video shows, and in how airlines can routinely overbook sets, charge for every possible amenity, and squeeze ever inch out of seats and legroom in the effort to pack ever more people on to a single plane. Worse, we have all heard about people who have been delayed from takeoffs and then forced to spend hours in a plane as it sits idle on the runway, with no effort to allow people to disembark after waiting for hours in a cramped, stuffy container.

While the airlines may be in the headlines today, the other large industry which hates its own customers is the financial services industry.

This industry’s distain for its own customers is worse than the airline industry since saving for retirement, college or just plain life, is regarded as secondary to the ability of investment firms, banks and insurance companies to do everything in their power to separate unsuspecting and uninformed customer-investors from their money by charging excessive fees, commissions or by selling inappropriate expensive products.

The net effect of this systemic re-routing of hard-earned customer money into the coffers of investment and banking firms contributes to the current retirement crisis. When this is combined with the disturbing video of the passenger being pulled from the United airplane, it could become a tipping point for disgruntled Americans to protest the dominance of unregulated capitalism against their own rights, as well as their own financial and personal security.

This is why a flash point could happen as the Trump administration moves aggressively towards more federal de-regulation at the same time customer abuses have become legitimatized after decades of systemic de-regulation. While the average American cannot articulate it, they correctly suspect that this continued power shift towards greater corporatism is coming at the expense of their individual liberties and financial security.

Abuses by the Financial Services Industry

While the financial services, airlines and communications industries, have been beneficiaries of regulatory capture (an academic term which explains how regulators become servants of the industry they are supposed to be regulating), the financial services industry has perfected this practice. In addition to manipulating regulators, the industry regularly takes millions of dollars annually from their own customers in their form of fees and profits and then perversely uses that same customer money to hire lobbying firms that push to enact regulations, laws and rules at the state and federal levels to  work precisely against the best interests of their own customer-investors. 

That’s why we see that the financials services lobby is the largest in Washington and worse, it is almost entirely funded by customer money. In the perverted logic of corporate America, this means customer money is being used to push laws and regulations that are anti-customer.

Today, the financial services lobby is the largest in Washington, spending $1.4 billion in the 2016 election cycle. Open Secrets said “the financial sector is far and away the largest source of campaign contributions to federal candidates and parties, with insurance companies, securities and investment firms, real estate interests and commercial banks providing the bulk of that money.” 

What that money buys is continued deregulation, lax enforcement of existing rules, control over regulatory agencies and access to any pending legislation that threatens the iron fist of the financial services business to always have the upper hand against its own customers.

So when we see a man being literally dragged off a plane, we can all relate to it.  In some form, we have all suffered the discomfort of flying on airlines that just want our airfares and do the minimum to make customers comfortable. No blankets, no chips; just keep your elbows out of the aisle. The evasive answers to delays offered by pilots and cabin attendants, complete with their frozen smiles, fake affection, lack of eye contact, and empty slogans (“We certainly appreciate your business. Have a great day.”), all wear very thin after years of going to the airport and the more intrusive TSA lines.

So if United is wondering about the causes for what the media is calling their current PR nightmare, their management should know it is not about a single event caught on cellphones.  It is being fueled by the pent-up disgust with how airlines treat their own customers in a monopoly capitalist situation where we don’t have that many choices and where elected leaders have failed to build more and more modern airports to accommodate more passengers.

The airlines know the public has few choices to fly and airlines only compete on price, so the public is squeezed into smaller and smaller seats, with less and less common decency provided by the airlines.

It’s Even Worse in the Financial Services Industry

In the financial services industry, we have seen the criminality from the mortgage fraud that caused the 2008 recession. We also have seen the global felony that affected millions of unsuspecting investors worldwide, as prosecutors made the case that traders at some of the world’s largest banks rigged LIBOR rates, foreign exchange, and gold and silver prices.

In the most recent charges, prosecutors charged traders in January 2017 at Barclays, JPMorgan Chase and Citibank, some of the largest banks in the world, with conspiring to rig exchange markets through discussions in an electronic chat room known as The Cartel, according to a news report on Bloomberg news.

The financial services industry also shows few signs of changing their anti-customer behavior. But, thankfully for astute customers, there are more choices for investors to find a replacement. This is because there are more online investing firms that focus on keeping fees and expenses down, such as Betterment, Wealthfront, Robinhood, Motif, Future Advisor, and Personal Capital, and for banking services, Aspiration or credit unions.

These firms are online and emphasize lower fees, so more money goes into your account. This is critical because the only investment variables any investor can control are fees, expenses and how much you save.  All else is up to the random moves of the markets.

There are also customer-owned, co-op credit unions to counter the criminal acts of the world’s largest banks that engage in price rigging (Chase, JP Morgan, Barclays, Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland) and in domestic fraud against their own customers (Wells Fargo.)

So when we see a man being victimized by a large corporation that overbooked its flight, read about a customer at Well-Fargo that had credit cards issued without their permission, or a class action lawsuit filed by 401(k) investors who paid too much for mutual funds, we should recognize this is the way too many global corporations do business in a near-monopoly marketplace.

The power of the public in these abusive situations is simple: walk away from criminal or arrant corporations that do not care about you. Close your checking account at a bank that makes the news for price rigging. Instead, go to a credit union. Close your account at a money management firm or financial advisors who pushes you to buy proprietary, more expensive mutual funds.

So, as we approach baseball season, remember that in order to protect your hard-earned money, adopt the “one strike and you’re out rule.” Don’t let a corporation or financial advisor lead you into their territory without making them provide good reasons. Even then, take their advice and have it evaluated by an informed, third party. This is the only way to protect yourself against the friendly corporation that really hates you.

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Chuck Epstein

Chuck Epstein

Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products. He also has written by-lined articles for over 50 publications, five books and served as editor and publisher of nation’s first newsletter on the topic of using the PC for personal investing and trading. (“Investing Online, 1994-1999). He also is a marketing consultant, writer and speaker on topics related to investor protection and opportunities in the very dynamic cannabis industry.

He has held senior-level marketing, PR and communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Lind-Waldock, Zacks Investment Research, Russell Investments and Principal Financial.

He has won national awards from the Mutual Fund Education Alliance (MFEA) and his web site, www.mutualfundreform.com, was named best small blog in 2009 by the Society of American Business Editors and Writers (SABEW).

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