Pitfalls of a Cashless Society

The “death of cash” is a worrying phenomenon. It’s obvious why financial corporations are pushing it though — people have been found to spend more money using credit cards compared to paying with physical cash.

“Sorry we’re not taking cash or checks,” said the clerk at the Fed Ex counter over a decade ago to an intern. “Only credit cards.”

Since then, the relentless intensification of coercive commercialism has been moving toward a cashless economy, when all consumers are incarcerated within a prison of corporate payment systems from your credit/debit cards to your mobile phone and very soon facial recognition.

“Terrific!” say those consumers for whom convenience and velocity of transactions are irresistible.

“This is nuts!” say a shrinking number of free-thinking consumers who are unwilling to be dragooned down the road to corporate captivity and coercion.  These people treasure their privacy. They understand that it’s none of any conglomerate’s business – whether VISA, Facebook, Amazon or Google – what, where, when and how consumers purchase goods and services. Or where and when they travel, receive healthcare, or the most intimate relationships they maintain. Not to mention consumers’ personal information can be sent to or hacked around the globe.

Cash-consumers are not alone in their opposition to a cashless economy.  When they are in a cab and ask the driver how they prefer to be paid, the answer is near-unanimous. “Cash, cash, cash,” reply the cab drivers in cities around the country. They get paid immediately and without having to have a company deduct a commission.

Back some 25 years ago, Consumers Union considered backing consumer groups to sign up Main Street, USA merchants who agreed to discount their wares if people paid in cash. For the same reason – merchants get to keep all the money on sales made with cash or check. Unfortunately, the idea never materialized. It is, however, still a good idea. Today, payments systems are much more comprehensively coercive.

Once you’re in the credit card system, lack of privacy and access to your credit are just the tip of the iceberg. That is why companies can impose penalties, surcharges, overcharges and a myriad of other corporate raids on your private treasury. They get immediate payment. If you object, you could see a lowering of your credit score or your credit rating. Besides, you don’t even know you agreed to all of these dictates – banks have over 300 different special charges for their revered customers – in fine print agreements that you never saw, read or even possessed to sign or click on. What’s the likelihood that banks would continue to surcharge you if they had to bill you instead of debit you?

The sheer pace and brazenness of corporations when they have instant access to your credit is stunning. The recent crimes of banking giant Wells Fargo, including selling auto insurance and assigning new credit cards to millions of their customers who had no knowledge and gave no consent for these charges, which resulted in damage to these customers’ credit scores and ratings, can only be committed when consumers are turned into economic prisoners. There are still no criminal prosecutions of the bank or its bosses. Wells Fargo bank stock rose to a year high last month. To their credit, the CFPB imposed a $100 million dollar fine on Wells Fargo, which barred them from deducting the fine as a business expense.

Coercive fine print contracts rob you of your consumer rights by preventing you from going to court, imposing fines as high as $35 fines for  bounced checks (which typically cost the banks less than $2), and decreeing that you agreed in advance to all kinds of unconscionable abuses, so long as you are in a “customer” status with them. Some companies are even charging customers for quitting them.

The rapacity inflicted on cashless purchasers prevails across the economy – insurance, mortgages, telecommunications, healthcare, stock brokerage, online buying and, of course, requirements to use electronic payment systems.

The more consumers become incarcerated by the companies that purportedly serve them, the more lucrative commodity consumers become. This leads to, among other problems, massive computerized billing fraud in the US. In the healthcare industry alone, billing fraud amounts to ten percent of what is spent, according to Harvard applied mathematics professor Malcolm Sparrow, author of License to Steal. This year’s expenditure of ten percent of the $3.5 trillion expected to be spent amounts to $350 billion. A cashless economy further facilitates these larcenous practices.

A computerized economy is one where fraud can easily be committed on a massive scale, according to Frank Abagnale who, after serving his time in prison for identity theft, has become an impassioned educator (serving institutions ranging from the FBI to AARP) on how to detect and avoid such crimes, which he estimates to cost people about one trillion dollars each year.

What it comes down to is whether consumer freedom is worth more than consumer convenience or whether the points earned for future purchases (assuming the costs are not passed on in hidden ways) are worth minimizing impulse buying, avoiding big data profile manipulations, keeping personal matters personal and requiring your affirmative consent to transactions where you decide what you want to buy and how you can pay.

However, it’s becoming increasingly difficult to pay by cash or check. Try renting a car or occupying a hotel room or buying a snack or drink on an airline without a credit or debit card.

In the latest example of such coercion, new boutique eateries like Two Forks, Dig Inn, Dos Toros or Pokee in New York City operate entirely through payment systems that reject all cash purchases. “But isn’t cash legal tender?” you might ask. How could they reject cash on the barrelhead? Simple, says the Federal Reserve, so long as they notify you in advance. It’s that fine print again.

The New York Times, reported these rejections and noted: “Not surprisingly, the credit card companies, who make a commission on every credit card purchase, applaud the trend. Visa recently offered select merchants a $10,000 reward for depriving customers of their right to pay by the method of their choice.” The nerve!

Cash consumers of America arise, band together and organize a National Association for the Preservation of Cash Purchases. You have nothing to save but your freedom, your desire to push back and your precious, affirmative and personal right to consent or not to consent, before you are forced into contract peonage.

Interested? Let’s hear from you at info@csrl.org.

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Chilling Chinese Social Credit Blacklist

I mainly criticize the corrupt activities of the U.S. government and the corporations originating there, but I occasionally devote energy to criticizing other states if it’s significant enough. Chinese repressions such as its heavily authoritarian, state-sanctioned system of discrimination fall into that category.

Apple CEO Tim Cook looks forward to a “common future in cyberspace” with China, he told the Chinese government’s World Internet Conference earlier this month. This was an embarrassing gesture toward a state that aggressively censors the internet and envisions a dystopian future online.

The experience of lawyer Li Xiaolin may give a taste of what that future looks like. During a 2016 work trip inside China, he tried to use his national identity card to purchase a plane ticket. To his surprise, the online system rejected it, saying he had been blacklisted by China’s top court. Mr. Li checked the court’s website: His name was on a list of “untrustworthy” people for having failed to carry out a court order in 2015. He thought he had resolved the issue, but now he was stranded more than 1,200 miles from home.

Mr. Li’s dilemma was due to the Chinese government’s ambitious “social credit system.” Launched by the government in 2012, it vows to “make trustworthy people benefit everywhere and untrustworthy people restricted everywhere” by the time it is fully implemented in 2020.

This is no anodyne credit score. By rating citizens on a range of behaviors from shopping habits to online speech, the government intends to manufacture a problem-free society. Those with low scores will face obstacles in everything from getting government jobs to placing their children in desired schools. It remains unclear exactly who will run the system, whether or how one could dispute scores, or even whether the system is legal.

[…]

Chinese government authorities clearly hope to create a reality in which bureaucratic pettiness could significantly limit people’s rights. As President Xi Jinping’s power grows, and as the system approaches full implementation, more abuses will come.