A friend recently lent me the DVDs of the series of interviews called Errol Morris’ First Person. For those who don’t know, these are one-on-one interviews with assorted interesting (but not hyper-famous) people, filmed in a highly stylized way. Errol Morris did “The Fog of War,” which I really liked, so I was interested in seeing more.
I do recommend watching a few, though I think I overdosed by watching too many in a row. One in particular has me thinking.
The interview is with Andrew Capoccia, an attorney who specializes in helping people get out of credit card debt. First, he finds all the places where the creditors broke the law and sues them for damages. He points out that credit card companies break consumer laws almost as a matter of course when trying to collect.
Another tactic is simply to negotiate. He says: look, the amount in question is $50,000. My client can afford to pay $5,000. Take it or sue us. Often, they’ll take it.
These both seem reasonable to me, but I get a little uncomfortable in the psychology of the thing. Capoccia says that a big obstacle to getting out of debt is the guilt that people feel over not paying what they owe. Sometimes the agent on the phone will actively try to make the debtor feel guilty, saying, “you bought these things. Don’t you think you should pay for them?”
Capoccia says that people shouldn’t feel guilty at all. He says to think about it as a business: when a business can’t pay a debt, no one feels guilty. They just all sit down and work it out. People shouldn’t feel guilty either. You’re in the business of getting out of debt.
But I think I disagree with his premise. I think that businesses, or the humans who make business decisions, should feel guilty about not being able to pay off a debt. They’ve broken promises, and there’s an actual cost to it. It’s not victimless.
Whenever a loan isn’t paid back, someone has to pay. Big, faceless credit card and insurance companies have little employees with lots of faces. Maybe enough defaulted loans mean layoffs, or less vacation time, or inferior health insurance. Maybe it means that they give less to charity. But even without all that, doesn’t it matter that it’s just not your money? You’re spending someone else’s money.
I wonder what Capoccia would say if the lender was the mother, or friend, of his client? Is it still just the business of getting out of debt? “Sorry, Mom, but you can take a quarter of what you lent me, or you can sue me.” Is that right? And if not, then why is it right when the lender is a corporation?