Banks going after troubled borrowers to give them more credit!

I was listening to Clark Howard yesterday and he says that the number of bankruptcy filings is likely to hit an all-time high in 2009.

Clark also says that according to The New York Times, banks are buying “trigger lists” from credit bureaus and independent data management firms. These lists compile info about who is in bankruptcy or otherwise in desperate financial shape. Once a bank obtains a trigger list, they target the people on it with horrible come-ons for new lines of credit.

Wouldn’t you think that banks would have learned their lesson by now? Isn’t this the sort of shit that got us into this economic mess? You know, giving people lines of credit who already can’t or couldn’t make their payments and also have a low income.

Their “second chance” pitches offer you another shot at rebuilding your credit by opening more of it! One industry insider in the Times article referred to this segment of the market as “creative lending products.”

You’re typically expected to pay hundreds of dollars to apply for a credit card that may have annual fees of up to $200. Then you’re given a credit line that’s equal to what they charge you in fees — so that the risk to the bank is nada. In addition, they charge you massive rates of interest.

Equifax has a proprietary way of culling names for trigger lists called the TargetPoint Predictive Triggers system. Basically, the bureau analyzes data to see a customer’s propensity to open new lines of credit within 90 days. The exact formula, however, remains a “secret sauce,” according to a spokesperson in the article.

Trigger lists are also common in the world of mortgages. When you apply for a mortgage, your info can be sold so that other marketers can call you and solicit your mortgage business.

This is so far out of line, according to Clark. Here we are in a time when we need to heal both the banking sector and our family budgets, and everybody is trying to slice and dice us to figure out how to take advantage of us. Shame on all involved parties.

Clark wants you to know about this so you can resist the temptation of “second chance” pitches. It’s not a lifeline they’re offering; it’s an anchor around your neck that will make you financially drown.

Read the full NY Times article.

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