THE BIRTH OF THE CONSPIRACY: CITIBANK

In 1991, Citibank was the first credit card issuer to come up with a scheme to deceive and defraud business owners, misleadingly called The Price Guarantee Plan.  Without prior warning to the hundreds of thousands of businesses with which they had contracts (via the Visa/MasterCard Agreements), in knowing violation of those agreements, they announced with great fanfare and publicity that they were going to save their Citibank cardholders money.  As this plan unfolded in the business sections of newspapers nationwide, Citibank unfolded this scheme to the public, announcing that they guaranteed their cardholders the lowest price on goods purchased when using a Citibank Visa or MasterCard account or they would refund the difference. . . 

Within a certain time limit, if that same product which the cardholder had purchased was offered in another store's ad for less money, Citibank would guarantee the same lower price to the cardholder who had already purchased it elsewhere for more money, but there was a small sneaky phrase at the end of the sentence that caught the nation's merchants off guard, and which most card users misunderstood, a clever con-man type of wording that said...even if the merchant won't!  The lie, the deceit, was in those five words, because they imply that every merchant should offer the lowest price possible, matching any and all competitors.  This perpetrates a fraud upon the sellers, and sets up an adversarial relationship between the merchants and their customers. 

In other words, they were offering discounts to entice Citibank card holders to use plastic, while merchants could not offer similar discounts in order to encourage payment by cash or check, as specifically stated in these once sacred Agreements. Citibank broke the pact with the merchandisers, and so began the road to a fraud that has cost sellers honoring plastic cards hundreds of billions of dollars over the past 15 or 16 years.

We business-owners had not been notified in advance.  Merchants were suddenly involved in the scheme but yet, had not been asked, consulted or advised that this was to take place and that they were part and parcel of it. If you get the idea, they FIRST would send our customers back to us, the Retailers, to demand that refund (which we had not ever offered to make, nor knew anything about) and if we refused to do so, we were made to appear to be the heartless villains who would not guarantee our customers the lowest prices, nor to make a refund to our clients. Those refunds had been guaranteed to them by the knaves at Citibank!  Citibank had put us in an untenable position and attacked our integrity for its own scheming dishonorable purposes; we had no defenses against such an assault.

It was one of the most devious schemes by a major corporation (especially a bank) that business owners had ever encountered.

Suddenly Citibank would become the White Knight to OUR own clients and customers if they made the refund after the business owners refused. It was clever and the nation's business writers in all the major newspapers fell for it hook, line and sinker.  By doing so, touting it as good for the consumers, they helped Citibank clean up and add millions of cardholders to their customer base, while undermining the merchants.

To repeat: First, they tried to force US, as Independent Business owners to make the refund in their stead, a refund that THEY had guaranteed to make!  Real crooks, or the Mafia, think up schemes like that, so what would you call Citibank in this case?

As soon as I read it, it seemed easy to understand and see through it.  The domain of banking was once in the field savings or loans, and ours, as retailers, was selling merchandise at a profit.  Now Citibank was invading our territory and trying to tell us what prices we should charge for our merchandise and dictate policies that merchants should follow. 

Yet, my fellow merchants up and down the street saw no harm in it, but once an invader gets a foothold and occupies some of your territory, the rest is easy to foresee.  The banking industry was as surely on the march as Hitler's hordes in 1939; that was my viewpoint and I tried to make it known nationally.  It wasn't easy, as I was to find out.

 THINKING LIKE CROOKS! CITIBANK?

That was the way they (Citibank) first double-crossed the trusting Merchants (Retailers) who had honored their cards in good faith for years!  Can you imagine, big shots, CEOs, CFOs, COOs and Presidents of a major banking corporations, such as Citibank, thinking like crooks?  Remember, this happened long before the collapse of ENRON!

Well, not that I'm such a great whiz at high-finance, but it seemed to me  that it was an invasion of the merchants' territory, buying, selling and pricing,, so I sat down and immediately wrote to the CEO at Citibank headquarters in New York, stating my objections. He didn't bother to answer my correspondence, nor did anyone else.  It was ingnored. In recent years though, large Corporations no longer seem to answer any correspondence from individuals, perhaps because they have so few people capable of doing so, or, as they grow in size, they become so arrogant that they are above question, above criticism, and think of themselves as invincible.

ORDERING THE SIGNS

How could one lone individual get their attention?  That was my next thought, and using a sign in the window of my Gallery came to mind, a sign that would draw attention.  There were thousands of tourists passing by my gallery every week and it might bring some response, so my next step was to design and order the sign made, the sign pictured above.

Then I photographed the sign in my window and sent out just a single copy of it by FedEx to Richard E. Braddock, CEO of Citibank.

 Gadzooks, within 48 hours I had urgent personal calls and actual threats from Vice Presidents of Visa, MasterCard, and Citibank (while my good friends at my local bank, the SBB&T were forced to threaten me too the same at the insistence of all of the above Corporations).  This was followed up by a strong letter from Citibank's Chief Attorney, who was also a Citibank VP, which let me know that I was highly unpopular with them.

Before placing the sign in the window no one would acknowledge my letters or calls, now I was suddenly on a first name basis with four VPs from the east coast and west coast.  Following that up, there was a personal letter from the President of Santa Barbara Bank and Trust, advising me that they would have to terminate my Acceptance Agreement if I did not remove the sign from my window, according to their Agreement with these same corporations.  SBB & T was not going to stick their head out of its' shell to defend a small local business, no, they didn't have the guts to do that. 

Trying to fight it, to gain some allies, I kept that sign in my window (on Solvang's main street) for six weeks, where thousands of tourists could read it and many took the time to photograph it as well.

The local banks' personnel kept checking on me and eventually they gave me an ultimatum, "Get that sign out of your window or we'll ruin you!" They didn't use those exact terms, of course, but the meaning was all too clear, for credit cards accounted for around 15% of my sales and canceling my Agreement was tantamount  

A Mafioso would have been a bit more direct, I guess, but I can't say they (Citibank, Visa and MasterCard) were too subtle; they could not allow anyone to step out of line, to expose the plan, a rebel who would raise an alarm, or their scheme might collapse.

They did, however, during my talks with the Vice President of Citibank agree to eliminate the term "even if the merchant won't" in their future advertising. It proves, though, that "one person can make a difference". I won a small skirmish, but they took the field.

I did insist to the VP that this would result "in something worse, a new plan, that this was only the beginning, either by them or by a competitor, coming out of this, that this was their opening shot against the merchants. He assured me that this would not happen, but those assurances fell on deaf ears because I simply did not believe him; I was to be proven right several months later when their Air Miles program was introduced, also with much fanfare and cooperation by the Business Sections in all the nation's media,, and it was a much stronger attack upon the retailers of American than I could have ever predicted.

The story about the Citibank signs did make it to the Wall Street Journal, and other papers, but they did not mention the scheme because they did not see and understand my point of view.  The sole interview was by an AP reporter.  (*See article in Wall Street Journal).

FOUR VICE PRESIDENTS CALL ME IN TWO DAYS!  YEP, FOUR!  VISA, MASTERCARD, CITIBANK AND SANTA BARBARA BANK & TRUST.

TILTING AT WINDMILLS.

It was nice being noticed, but I did not get the support from others that I was looking for, because I wanted other business owners to recognize the transformation that was taking place in the attitude of the Banks and Credit Card Cartel towards the Independent Business Owners. 

There was no support from my fellow merchants in Solvang, from the Directors of Chambers of Commerce in other cities to whom I had sent my pamphlets.  Not a word from members of Congress either, in fact not one responded.  Visiting local stores and talking with them, I heard horror stories about what was happening to them, but they simply accepted it without a murmur!  It was like The Terror from the French Revolution, the fear of the NKVD is Russia, the East German Secret Police, the Cuban agents that enforce government edicts.  How quickly, how easily people can be silenced, who fear the power of the banking industry, fear Wells Fargo, fear Bank of America, fear Visa, fear MasterCard, fear Capitol One.

I could not beleive it, that they were afraid of Visa and MasterCard and these humongous banks!  They were willing to take The Royal Shaft, rather than make a united stand to express their objections to such acts of piracy by these lartge corporations, to force them to back down and stop the Air Miles and other forms of bribery, to stop defrauding them of their profits.

Visa and MasterCard, along with the participating banks, sent out so many phony lying Press Releases that you'd have thought that there was a reincarnation of Hermann Goebbels, that Hitler's propaganda chief was at the helm for this effort, the tyranny of plastic.  The papers sucked it up like sugar-free cola and reprinted every word sent out, word for deceptive word, verbatim.  There were no objections, no questions, no analysis of what it would do to the merchants who had been ensnared slowly over the years, but were now being enslaved to this vicious new system.  Instead there was just meek acceptance from them, while the Financial columnists ate it up, devoured it, burped and then smiled.  Brainless hacks, writers without an original thought, some working for the Los Angels Times, etc.

My next step was to write a letter and send a copy to Financial Editor as well as every reporter on the Wall Street Journal, but I did not get a single reply.  To them, not only was I a befuddled old Don Quixote now, but most likely classified as a real nut case as well.  I guess it didn't help that my business and my office were located in a Square in Solvang, in which the outstanding landmark in town, a huge blue Windmill, was located! 

To understand more about the Credit Card industry, click below:

FRONTLINE Report on Credit Card Industry

AMERICAN EXPRESS, MASTERCARD & VISA HAVE A CHAIN AROUND OUR NECKS!   Business owners are in chains, forever locked into a business arrangement that enslaves them, because they have no way of escaping bondage. They are locked in, ensnared, and subjugated.  Compare them to Russian serfs, in perpetual servitude for the length of their business life. They are no longer call themselves an Independent Businessman, or brag that they are their own bosses. The Banking Cartel, or Credit Card Cartel is in charge of every business.  It is the Credit/Charge Card Cartel  that is in charge, control and business owners are nothing more than peons to them!  There can no longer be pride and satisfaction in owning a business; in the end it is under the control of the Credit Card Cartel. That chain around my neck isn't a joke! It's the truth! Those big International Banks now control YOU and YOUR business, big or small, just as they did mine. We are all enslaved, nothing more than serfs, in our own stores, with our own money, with our own ideas and creativity, we're still...serfs, those thin bony fingers sneaking into our pockets and smoothly snatching their percentage of our profits.

THEN IT MADE THE WALL STREET JOURNAL: