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June 2019
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President's Corner
Courthouse
Occasionally, a 1st Nor Cal member gets frustrated because our business practices may come into conflict with member service. I’m sorry that happens, and if I could do anything about it, I would change that particular method of doing business. Unfortunately, we are a nation of laws, some of which clash with what we think is in the best interest of our members, which is our ultimate goal.

Why does this happen? Usually, it’s because a company or a bank, or in this case both, do something so unethical that elected officials have to intercede and make a law to stop the bad behavior. As an unintended consequence, the new law inconveniences the good companies or credit unions from providing exceptional service, which is sorely lacking today, to consumers. The following story is nothing short of fraud and exploitation of working class people.

Home Depot was working in cahoots with Citibank and Carolina Water Systems (CWS), which is a privately owned company selling water softeners, and water filtration and air purification systems. CWS is different from Carolina Water Service, which is the actual utility serving North Carolina residents. Note that CWS has the same initials and almost the same name as the utility company which adds an extra layer of intentional confusion.

Here’s how the scam worked, according to Slate Magazine: Representatives from Home Depot or CWS called homeowners and claimed that contaminants were found in nearby tap water. They urged the homeowners to allow them to perform a test which was in actuality a test for water hardness. Almost all tap water tested positive, even if it was perfectly safe. CWS told homeowners the water was proven to be unsafe and required a $9,000 water purification system that other companies sell for $1,400. The company then told homeowners they had been approved for a Home Depot-branded Citibank credit card which they could use to pay for the system with deferred interest.

It gets worse. The CWS salesperson told homeowners the Citibank card had zero interest for two years. However, the interest rate jumped to 25.99% after one year. If the homeowner could not afford to pay, Citibank sued them in court to collect the debt.  Consumer protection lawyers sued Home Depot, CWS, and Citibank on behalf of almost 300 homeowners, claiming the three miscreants had violated North Carolina state laws prohibiting unfair and deceptive trade practices.

Without going too much into the weeds, the case changed from one involving deceptive trade practices to whether a federal or state court would be able to hear the case. The U.S. Supreme Court ruled in a 5-4 decision that the case, known as Home Depot v. Jackson, can be heard in a consumer-friendly North Carolina courtroom instead of a perceived business-friendly federal courthouse. This decision does not guarantee Mr. Jackson and his fellow scammed homeowners any monetary damages but does give them a better chance of prevailing.

I tip my cap to Mr. Jackson for having the courage to take on not one, not two, but three major corporations that could easily crush most of us. It is cases like this that get Congress and state legislators to pass more restrictive laws that make doing business a little more difficult. It’s not a bad thing if it curtails this type of predatory sales, but it’s a shame we all have to sacrifice exceptional service because of a few bad actors.

David M. Green

President/CEO
dgreen@1stnorcalcu.org
(925) 335-3802
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We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.
We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.
Recommended Five-Star Institution by Bauer Financial "Because peace of mind matters"
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