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I’m writing this article at 40,000 feet above Canada as I fly back to the UK from the US. It is no longer surprising that consumers in these countries and all other market economies that enjoy the benefits of consumer credit are at a significant disadvantage of achieving a healthy financial future. And since it is a long flight, I’ll tell you why.

So as I hurtle along at 600 miles per hour I thought of these four reasons why consumers will most likely never win the battle against the banks for fairness and why you will be constantly bombarded with opportunities to go further into debt.

Free Market Economies Need Profits Generated Off Of You - Business and banks move at the speed of profit and without profit there is no incentive for business to work hard and create jobs, as an aside.

Jobs are created by business as a tool to use in the pursuit of more and more profit. In the banking business and all other businesses combined, we can’t fool ourself that the pursuit of profit must be an important, if not the primary goal. And don’t fool yourself into thinking that this belief is only held by the greedy big business or massive banks. Even the proverbial good hearted charity or community credit union needs to pursue profits to remain in existence to provide a service and perform a mission. Business only continues if it generates profits.

Profits are made from sales to a group of people called “consumers�, AKA, “you and me the average schmo�.

Have you ever wondered why we are called consumers? It is simply because our value in a free market economy is to do what the label says, to consume. Consumption occurs through the exchange of currency in exchange for products or services we want or use. And hopefully through that exchange the seller will make a profit. And that is the cycle of life.

There is Nearly No DMZ Between Being a Good Corporate Citizen and a Good Profit Maker - I’m struggling to think of businesses that can create a profit and create a by-product that is entirely without the potential of harm or foul. Even good groups that I believe in like Kiva.org have the potential for creating strife and hardship out of the best of intentions. They can raise money that is given to local in-country micro-lenders to help fund a fundamentally flawed small business that sets up that person for failure.

Don’t get me wrong here. The potential for good over bad with Kiva.org exists and that’s why I help to fund small businesses through them.

Credit card companies and banks present a facade of good corporate citizenship but it is inherently impossible for a money lender to not cause intentional or unintentional harm by their actions. And even if the lust for profits over people does not exist, a lender has no control over how the proceeds of a loan may be used or misused.

All loans can be used for good and bad. A home mortgage creates a shelter, house and home for a family but if used to purchase too much home or in conjunction with too many other purchases or followed by a reduction in income, the home can become a source of pain. Just look at our current foreclosure and repossession rates as an example of home loans gone bad.

Banks Move As Business Units, Not as Individuals - A bank and credit card company does not move by individual thought. It is a collection of responses in the pursuit of the ultimate goal, profit. Compliance departments are trying to keep the company inside the government rules. Legal departments are trying to keep the company from running aground on hidden shoals. Marketing is trying to sell the company loans and credit to everyone and collections is cleaning up the mess.

Consumers dream of having a logical and human response by banks to their individual situations when they run into trouble and that’s just not going to happen. When people run into trouble, the role of the bank is not to be fair and reasonable in a human way or even to respond the needs of the customer. The goal of the bank is to mitigate losses using the official policies and procedures the bank has created. Anything outside of that does not exist as a real possibility.

Our parents and those that cared about us, told us as we grew from innocent children into young adults that anything in life is possible, and that is true to an extent. One of the parts that falls outside the hope of possibilities is that a consumer will actually be treated outside of the written corporate policies of the lender. It won’t happen.

Now here is where it gets crazy. Let’s say your account is 60 days past due and the collectors you are dealing with are telling you No - No - No. Now that doesn’t mean that a Yes isn’t around the corner once your account gets passed to the next recovery team.

Each group in recovery has different policies and procedures at their disposal and when one team says No, the next team may say Yes. This isn’t because they suddenly came to their senses. It’s because they have a different set of rules to play by.

The Banks Mission is to Suck You Dry - Sounds heartless and unbelievable, doesn’t it. But the banks mission is the pursuit of profits and the only way to do that is to attract customers in order to generate profits. Remember what I had said, that profits are generated as the results of sales so the bank is going to continue to push their products and services at you once you become customer. Does this sound familiar? It should. Your bank is going to promote new loans, increased credit limits, insurance, investments, etc. Banks make money from the sale of financial products.

So once the bank has landed you as a customer the next goal will be to get you into a position where they can make more money off of you.

This might be in the form of giving you generous loan terms and access to credit, but also by allowing you to get so indebted to them that you really can’t go elsewhere. The bank may also keep letting you get committed to them until you are so far from shore that you can’t make it back to get out of debt. They do this with “skip payment programs�, credit limit increases and convenience checks.

Once you are in a disadvantageous position the bank will make every effort to charge you every possible fee and raise your interest rates to generate more profit. Banks do things like letting you go over your limit and then charge you for doing that. All in the name of maximizing income per unit, and guess what, you’re the unit.

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Coming up in a planned article I’ll give you some tips on what you can do to avoid getting sucked into this trap and being used like a pawn in the pursuit of profits by your bank.

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Steve

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