Chile Forum

cali_chile48 wrote:I prefer to keep my distance from companies that make it a point to extract as much money as possible from desperately poor people.

But you still have to buy your pisco somewhere.

Well, last I heard was that they were still trying to screw over their customers. They proposed a solution, and asked their customers to come in and sign the compromise. Everyone in the government investigating and the central bank had at least the good taste to tell the customers that they did not like the deal that la polar was offering as a compromise to their customers that were effected, and recommend that customers do not accept it.

I want to see not only heads roll at the executive level, but down to the frigen secretaries at the credit desks. This had been going on for over 3 years. They knew.

I also want to see them go witch hunting through the records for all the poor saps that paid, even though they should not have, for fear of destroying their credit records. After 3 years, there must have been hundreds of millions of dollars in extortion and robberies from people that could not afford to be robbed.

They have raided most of the homes of the execs ,including former executives.

Good news is, they not only screwed over the little people, they screwed over the richest and most powerful people in the country. There will be blood and the AFPs and mutual funds are screaming for it now, especially that they want to do a stock offering to recap the company (yea, let's give the thieves some more money, especially as the house is burning down).

There are a lot of individuals that have already filed law suits on their own for the losses. They cooked the books, and lied for years about it.

The central bank however did point out, the system worked. They did catch them. It was slow, but it was high number of complaints from consumers to the consumer protection agency, that eventually lead to the house of cards falling apart.

Perhaps this will give Chilean people more incentive to speak up when companies rip them off instead of being so passive. Maybe it will lead to better consumer protection measures. La Polar is just one example, an extreme example, of corporate misbehavior, but it's fairly common here. I've only been here for three years, but I have had problems with insurance companies, department stores, real estate agents, car repair shops....much more so than in the US. Sernac is a start, but Chile needs a lot more consumer awareness and laws with teeth to stop these abuses.

The scale and visibility of this case gives me hope that consumers are going to be less passive about such ripoffs, businesses will be scared into cleaning up their act, and the government can sometimes actually do what they're paid to do. (What next otravers, free unicorns dropping from the sky on rainbows?)

It's nice to know that my pension in Chile is just as secure as my pension in the US:

http://www.bloomberg.com/news/2011-06-28/chile-pension-fund-expects-to-recoup-la-polar-investment-1-.html

Yet another instance of a company loaning money to customers so they can then "buy" their stuff, increase sales, and run up the stock price. Better than perpetual motion. What could possibly go wrong?

Up here, the Chinese have dozens of start-ups in the markets that lured American investors and hedge funds. Now it looks like many of these "hot" opportunities are just accounting frauds, and not a week goes by without news of one imploding with huge losses for investors. I certainly hope the Chilean version of the SEC is more vigilant than ours when it comes to oversight and accounting standards. From what I've read and heard, any investor had better double-up on due diligence if they decide to get involved with an Australian or Chinese company. Culinary accounting seems to be one of their specialties.

The credit card companies here, like those in good old 'ethical' Britain all seem to be doing exactly the same thing. exploiting people who just do not understand what interest rates mean. In the UK they used to send me letter after letter offering higher credit limits and on occasions raise it without even asking. These practices and other similar practices ( for example not clearly identifying how much the interest rate is and what you end up paying) are being brought here or are being copied here with very little control..... Don't people( governments) learn or I am just being naive.

I suspect the property market is the next problem that's going to explode... new property is being built at an incredible rate and competition to sell and get commission seem to be fierce.. are the people getting mortgages really in a position to afford them?

Maybe Polar as arrived just on time !

Wow, this is big swindle for sure. PwC, how careless (?) could they be with the big chunk of missing dough? Now people are thinking, how much further could this bleed, into what other accounting clients. Can Chilean companies really afford to be this much like US companies...well, so much for consulting firms' advice...

The property market is not going anywhere in Chile, because Chile has already been there and done that in the 80's. Thus, why the real estate mortgage mess from the rest of the World just went right over the Chilean economy. By law, everyone has to have skin in the game when it comes to the real estate market loans. Pull back in pricing as normally and happens for any country, for some sectors, but not much else. Those little low income ticky tacky houses, cost nothing to build, and the bank mortgages can not be more than 80% of the value. Add to that whatever government subsidies someone gets when buying them. People then trade up from there. Thus, the big middle class market. On the top end, plenty of money in this country that owns a whole lot of real estate completely free and clear. They are not ghost mortgages to people with no credit, assets, or income, that are bundled up and pushed off on to the market.

La polar has proposed to offer a 5 thousand peso gift card to all the people that were overcharged, and paid their bills in spite of being taken advantage for use in their store only. How nice. The government is telling them they have to give back the money, or they are going to nail the company to the wall with a new round of criminal extortion charges just over the people that paid when they should not have. if they don't, they will get nailed by the Chilean public. Recall, who introduced credit cards to Chile?

Met0069 wrote:The credit card companies here, like those in good old 'ethical' Britain all seem to be doing exactly the same thing. exploiting people who just do not understand what interest rates mean. In the UK they used to send me letter after letter offering higher credit limits and on occasions raise it without even asking. These practices and other similar practices ( for example not clearly identifying how much the interest rate is and what you end up paying) are being brought here or are being copied here with very little control..... Don't people( governments) learn or I am just being naive.

I suspect the property market is the next problem that's going to explode... new property is being built at an incredible rate and competition to sell and get commission seem to be fierce.. are the people getting mortgages really in a position to afford them?

Maybe Polar as arrived just on time !

Personally I don´t feel sorry for anyone who buys on credit without caring about what interest rate he´s being charged. Here like anywhere else, there are many people who don´t give a damn as to how much they are paying in the end; they just want to know what the monthly instalment will be. It´s the obsession of having to have something right now instead of saving for it, that causes them to do it. How many people ever sit down and work out what a " compra intelligente" ( for a car), is actually costing them? Very few; so if they´r stupid enough to sign on the dotted line it´s their fault. Fraud is one thing but stupidity is different.

The problem is, that La Polar was unilaterally altering those agreements. These people did not sign on the dotted line. Most of these people had a legit debt they were managing (even if struggling a bit), and La Polar decided to alter the agreement and start piling on the debt (to not only screw the customer, but cook their books), until many of the people could no longer manage it and defaulted. Well rather than simply following procedure and initiating normal collection actions, reporting it to DICOM, and so on, they kept compounding the debt as collectible and good.

As for the employees of La Polar, there was one interviewed on TV the other day saying that it was in their training Manuel. The warehouse guys were protesting the other day, because they were saying people are blaming them and they knew nothing about what was going on in the stores. I want see some clerks and secretaries walk the plank. They likely will with their jobs at least.

The people that are really getting screwed are the suppliers, especially the small ones. There are thousands of small companies that La Polar owes, typically they have to wait 90-180 days for their payments. If la polar bites the bullet in to bankruptcy, they get nothing. The government is paid first, the employees second, the suppliers third (if there is any thing to get by then), the stock and bond holders nothing.