Evil Is Calling

“Think how proud your family and friends will be when you’ve shed those extra pounds and all those wrinkles.”

One of the more interesting part time jobs I had during the 2007 – 8 “financial crisis” was Night Security Guard at a local call center. My job was to check I.D.s of people entering or exiting the building, and stroll around the call floor as 200+ “representatives” took calls from all over the world, selling various products advertised on Pay TV.

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Operators really were “standing by” to take your call. As each call came up on the screen it showed:

• Product Interest. (Miracle Wrinkle Cream, Miracle Rain Gutters, Miracle Weight Loss, etc.
• Name / Age / Gender
• Phone number
• Address
• Credit history
• Available credit balance and short bio

The more the advertiser was willing to pay, the more detailed the information on the screen became. Various credit companies were flooding the mail with live credit cards, with as much as $10,000 available. “Just call the number on the back to activate.” Even I got one!

One night I happened to see a member of management in the lunch room and asked her “How does all this really work ?”

Since she perceived me to be a member of The Team she was quite forthcoming.

“When the operator answers your call he/she already knows who you are, a little about you, including your credit card number, and your credit history. Your answers to our questions just verify what is already on the screen.

“When Beula Butts of Shady Rest Trailer Park calls at 1 AM her time, about the New Miracle Wrinkle Cream, on sale for $29.95… we know quite a lot about her, and a good sales agent will be able to use that.”

I asked her if it went something like this.“ It’s late. Beula’s feelin’ kinda down, she’s single, pushing 40, no love life, and after a few beers she’s pretty sure some wrinkle cream can fix that.”

“Yea, that’s pretty close.” Ms. Management said. “Since the agent knows how much is available on that new credit card, he’s shooting for a ‘conversion’ which means he’s going to convince her to buy more, and then he’ll earn the commission that comes with that. A good agent will make the caller feel like family, and she’ll want to make him happy by buying more. There is a script on the screen to help him do that, but a good agent will make it personal, and manage his voice to make the script his own.

“Wrinkle cream can become Mega Vitamins, which leads to Food Supplements, which can lead to a whole suite of exercise equipment, work out clothes, work out videos and even a special Signature Model video player.”

Wow ! (and remember those few beers?)

A couple of nights later, I recognized a familiar face in the lunch room, the V. P. of a bank I recently had a construction loan with. The bank was seized by the FDIC (taxpayer bailout) and most of the staff was let go. Now here he was working as a telemarketer, so I asked about what I more and more believed was a pretty sleazy business.

“Oh yeah. A lot, or even most, of these people who call, especially late at night, have no business spending money on this stuff,” he said. “Credit card companies are sending out live credit cards to people who’ve never seen that much money in their lives, and they just can’t wait to spend it.

“What no one mentions, of course, is if you are late or miss a payment, the introductory interest rate jumps to 30% or even higher, and the monthly payment is calculated on the unpaid balance, which now includes interest and penalties. You could pay for years and never reduce the balance. When people realize that, they often just quit paying.”

If people went into default, I asked, could they lose everything they had. “Oh sure, and if they ignore a court order they could end up with a contempt citation, which is punishable by fine or even jail. In addition, their property could be sold at auction. They’d be squatting on the street when they got out.”

Over the next few weeks, I asked people I knew in the legal and accounting professions about the “end game” of this EVIL. Most were happy to talk. A “synthetic investment product” was specially created for this by Wall Street, called a Collateralized Debt Obligation. A CDO bundled all those shady debts together, then sold them as a top grade product to trusting buyers all over the world. Moodys, Standard & Poor’s, and other rating agencies gave CDOs top ratings as ultra-safe investments. The certificates were sometimes worthless, but Wall Street always got paid well.

Mortgage lenders were doing similar “predatory lending” with home mortgages. Called Credit Default Swaps, or CDS, the lenders passed the risk off to unsuspecting investors, and many went into default. Life savings and retirement funds were lost. Eviction notices were served, and the homeless population swelled. No bankers went to jail.

Rent or stream the movie INSIDE JOB with Matt Damon for a good documentary on how Wall Street spread their contagion around the world.

Yep, there is plenty of EVIL in this old world. As I watched the telemarketing dramas unfold night after night, I started to feel like part of the EVIL myself. Was I the Security Guard who watched as the cattle cars were loaded, and the innocents sent off to their ruin?

Fortunately, the economy hit bottom, or turned around, or whatever, and I left for other opportunities. The call floor shrank from 200 or so to about a dozen operators. The building was closed and is now up for sale.

When I see American citizens living in tents on downtown streets, I sometimes think “How could so many people have fallen so far, in so few years.” Well I know one way, and I was a small part of it.

Thanks for listening.