Saturday, December 19, 2015

The Battle over the Purpose and Accuracy of Zillow

In a series of articles in the Washington Post in 2014, David Howell, CIO at McEnearney Associates, a Northern Virginia Realty firm, and Stan Humphries, Chief Economist at Zillow and architect of the Zestimate, slugged out their views on the accuracy and purpose of Zillow Zestimates.  To read their original articles just click on their respective names above.  I have not checked out the accuracy of Howell's claims about the accuracy, or, rather, inaccuracy of Zestimates for the northern Virginia market, but I would venture to say that his numbers are not inconsistent with the observations that I have seen elsewhere.  Humphries, on the other hand, while suggesting that the numbers put forward by Howell are slightly inaccurate because he has not performed the analysis on a large national basis, points out that the Zestimates over time are getting more accurate, which may, in fact, be true based upon the way that both he and Howell measure their results.  However, I believe that in the arguments put forward by Humphries there are some very troubling and subtle slights of hand being proffered:

First, all the studies of accuracy are based upon the Zestimate at the time of sale vs. actual sale price of a given home that has sold in the marketplace during the period being measured for accuracy.  This sounds like a simple enough measurement.  However,  I have shown in an earlier writing, a phenomena that I have called the Zillow Bump.  For those of you unfamiliar with this phenomena I suggest that you read the entry.  In that analysis I show a very curious change in Zestimates that occurs once a property gets listed.  Namely, if there is a significant difference between the Zestimate and the listing price, then the Zestimate will start on a very rapid journey to get much closer to the listing price. I have speculated as to the reason for this Zillow Bump and the reason why I feel this is a disingenuous attempt by Zillow to "improve" Zestimate results over time.  In essence, there is a small window of time for Zillow to more closely align the Zestimate to the sale price, so that at the time of sale (ie., when the data is collected) the Zestimate is within a closer range of the actual sale price.  That window is between the time that a home goes up for sale and the time it actually sells. 

Before I get into this point any deeper I want to cover another issue raised by Humphries -- that the original listing price vs. actual sale price is no more accurate than the Zestimate. The implication here is that the two numbers (ie., original listing price and Zestimate) are to be considered identical prognostications of the actual sale price. Nothing could be further from the truth.  A listing price by an owner in consultation with a broker is usually intended to be close to the intended actual sale price, but usually with a bias to the higher side of the actual sale price. This is not always the case, particularly in very hot markets where bidding wars are expected.  I do not have accurate statistics, but I would venture to say that in normal markets the actual sale price of a home is somewhere between 5% to 10% below the listing price (except, as I noted, in very hot markets).  The listing price is never intended to be the market value of a home.  It is intended to be approximately 5% to 10% above the actual sale price.  So, to do an apples to apples comparison between listing price and Zestimate the upside bias of the listing price should be removed.  Once this bias is incorporated into an analysis it will be evident that this "adjusted listing price" is a much better estimate of actual selling price than the Zestimate is.

Now, getting back to the first point, we can now more clearly see what the Zillow strategy is -- to "cook the books" on the analysis of Zestimate vs. actual sale price by altering the Zestimate and hopefully bring the Zestimate to about 8% below the listing price before the house sells and then claim that they are within a tight range.  This is a shell game.  It is an implicit acknowledgement by Zillow that the broker/owner listing price is a much better basis for actual sale price (adjusted to account for the broker bias) than the original Zestimate and that the original Zestimate before the house was listed is literally worthless.

The final point to be made would be that Zillow is talking out of both sides of their mouth when they claim, on the one hand, that the Zestimate is not an appraisal price, but, on the other hand, that because it is as accurate as the listing price, it can be used as a measure of value.  This is a very dangerous argument.  Howell has aptly pointed out that the homebuyer is greatly influenced by the internet and because of the blurring of what a Zestimate really is and how inaccurate it is, the prospective  buyer is unfairly influenced by it.  This means that the seller is unfairly influenced by it too.  

Clearly, Zillow is free to compute whatever it wants to, but at the same time, owners should be able to opt out of this charade of the Zestimate accuracy.  In my piece Zestimates from Zillow are Worthless I argue that the Zestimate is as important as a person's FICO score and that the abusive implementation of Zestimates by Zillow should be regulated with legislation similar to the Fair Credit Reporting Act.
Bill Gasset, a ReMax realtor in Hopkinton, Massachusetts, wrote a very interesting piece shortly after the Washington Post articles appeared on the Zestimate inaccuracy issue.  In Bill's article he very aptly sums up many of the problems with the Zillow Zestimate, and actually had some positive things to say about the Zillow platform.
In 2015, The Los Angeles Times also ran an article on the inaccuracy of the Zillow Zestimates.  They reported on an interview on the TV show "CBS This Morning" where co-host Norah O'Donnell asked Zillow's Chief Executive, Spencer Rascoff, about the inaccuracy of their company's Zestimates. Rascoff's position is that the Zestimate is a "starting point" for determining the value of your home. In my humble opinion, it is a "starting point" as good as one you might hit when throwing a dart while blindfolded.  It is a marketing gimmick to attract attention to the Zillow website, no more, no less.

The proper numbers to measure are pre listing Zestimate vs. Actual Sales price.  You may want to factor in some sort of small deviation from this difference to take into account changes in the areas during the listing time.  For example, if immediately before the time that a home was listed it had a Zestimate of, let's Say X, and it took six months for the home to sell, then it would make sense to alter that number X by the amount that homes in the immediate area (say zip code, or something like this) have changed during that period.  For the case in point, let's say that it is six months and that the zip code has increased in value by 1.3%, then it would be fair to argue that the proper Zestimate value to use for comparison to the sale price is 1.013X, not X. 

Wednesday, November 25, 2015

Zany Zillow

The Zillow Zaniness continues.  I have posted twice before on Zillow and their infamous Zestimates.
I have found another Zestimate that defies gravity that I would like to share with you.

The upper line in the chart below is the Zestimate of the subject home as a function of time from about the beginning of 2007 to the present. The lower lines are the prices for homes in the same zip code and the town.  The two latter lines seem to be very closely correlated with each other and are moving in a rational manner.  The green dot with the "S" is placed at the date and value of the last sale of the property in 2010.
Property A, version 1

Below I have listed the sale transactions on this home since 1999:
Date                                  Sale Price
8/10/1999                          $650,000            
4/1/2005                         $1,350,000
9/24/10                              $500,000

Unfortunately, the Zestimate chart does not go back to 2005, but from the best I can figure the Zestimate must have been considerably higher than the actual sale price.  Then, in September, 2010, the home sold for $500,000, yet the Zestimate at the time of the sale was $2,500,000, a full 500% of the sale price.  If that wasn't enough, then by May, 2015, the Zestimate for this home had gone up to $4,000,000.  a full 800% above the price it sold for some 4 1/2 years earlier.  Now, you might think that this home was renovated, or there was an addition or something.  That is not the case.  The home remains the same, except the city removed a tree at the street in front of the home in May, 2015. So, what happened to the Zestimate?  It now has dropped in six months from $4,000,000 to $2,945,000, a full $1,055,000. or about 26.5%. 

Can you give some explanation for this fluctuation in the Zestimate? I can't.

****************update 1/21/16***********************
The Zestimate on the above home has continued to slide. As of today it is $2,657,800. So, we now have the Zestimate dropping by almost another $300,000 in two months.  Total drop of $1,342,200 or a full 1/3 of its value in about eight months.

In another attempt to get a handle on the algorithm that Zillow utilizes to come up with their Zestimates I took my home and made some minor changes to the Home Facts.  I changed the flooring material from hardwood and carpet to hardwood, carpet, and tile. I changed the exterior from stucco to stucco and wood.  The result was a decrease of nearly $200,000 in the Zestimate.  I restored the Home Facts to the original values and the Zestimate dropped another $5,000.  More Zaniness.

******************additional material added 1/21/16****************
I have found another home with Zany Zestimates. Please consider this home.  Here is the Zestimate Chart.

And here is a chart of the activity on this home:

Date                 Zestimate         Listed Price
7/14/14            3,200,000          2,995,000
11/25/14          3,300,000          removed from market
5/1/15              3,500,000          unchanged (off market)
6/1/15              3,100,000          unchanged (off market)
9/14/15            3,200,000          2,850.000
11/1/14            3,200,000          2,850,000
12/8/15            3,500,000          2,895,000
1/20/16            3,730,900          2,895,000
1/21/16            3,746,500          2,895,000
1/24/16            3,759,900          2,895,000
2/7/16              3,837,500          2,895,000
2/14/16            3,895,000          2,895,000

Here we really have the Zestimate gone wild.  We have an unbelievable divergence between the Zestimate and the Listed Price.  Since the Zestimate started above the Listed Price, the Listed Price has dropped, AND the Zestimate has increased substantially.  Does anyone really think the Zestimate has any relationship to the market value of this home?

As of 2/14/16 the Zestimate has risen by $695,000 since 9/14/15.  That is a whopping 22% in exactly 5 months. But even more weird is that now the Zestimate is exactly $1,000,000 ABOVE the Listed Price. That's 34.5% above the asking price. Yeh! Without even looking at this home I am going to guess that it will sell for about $2,637,000.  Let's see what happens.

***************additional material added 6/17/2016***************************

This chart below labeled Property A, version 2 is for the same property as the one labeled Property A, version 1 (the first chart above).  You will note that the only sale is for the same amount, but what zillow has done here is revisionist history.  In the chart above the property peaked at about $4M, but this one now reads less than $3.5M. Note also that the Zestimate in the period from about 2010 to about mid 2012 was hovering just above $2M while the chart above was near or above the $3M level.  I know it is an expensive home, but a 33% drop is a bit much of revisionist history.
What could be in their minds?  This must be a random number generator hoax or something.

Property A, version 2

update as of 11/4/2016

We have an update on this home. Please note in the chart below (same property) that the revisionist history of the Zestimate continues.

Notice that about December, 2015, in the upper chart the Zestimate is clearly below $3M, and in the second chart the value is clearly below $3M !

last modified 11/4/16

Monday, November 9, 2015

The Zillow Bump

For readers of this blog, my fascination with the audacity of Zillow is not new.  If you will recall, I wrote in September, 2014, that Zestimates from Zillow are Worthless by showing that there is no rhyme or reason to the numbers that they publish as the "market value" to a home. I posted many updates to that post.  I have now observed a variation on this that further supports this hypothesis.

My first example is a home that had a Zestimate of $1,700,000.  Then, on March 4, 2015, this home was listed for sale for $3,780,000.   You can see from the chart below what has happened to the Zestimate for this home primarily based upon the home being placed on the market:

Five months later, in August, 2015, the Zestimate had zoomed to $3,358,700.  This is almost a 100% rise in the Zestimate.  Subsequently, on September 11, 2015, the listing for the home was shown as a pending sale, On October 28, 2015 the home closed at $3,300,000. As of November 9, 2015,  only two weeks later the Zestimate dropped by $385,600  to $2,973,100.  What could possibly be the explanation of this bump? My hypothesis was that it would be too obvious if Zillow increased the Zestimate to match slightly less than the listing price on an immediate basis, but rather gradually increase the Zestimate, so that by the time of the sale a number of months later the Zestimate would rise enough in the interim to more closely correlate to the sale price.

However, here is another example that seems to demonstrate that they have no shame. This home had a Zestimate of $1,358,500 on October 9, 2015.  Then, on November 4, 2015, this home was listed for sale for $2,495,000.   You can see from the chart below what has happened to the Zestimate for this home solely based upon the home being placed on the market:
As of November 11, 2015, the Zestimate for the home was $1,914,300, an increase of $555,800 over 30 days previously.  That is an increase approaching 50% in one month.

Zillow prides itself on the fact that the statistical correlation between the Zestimate and a home's sale price is high.  Could it be that Zillow is "cooking the books," so to speak, by trying make the Zestimates "catch up" to the expected sales price by BUMPING them up when the home gets listed for sale?

As a corollary, consider this: realtors pride themselves in pointing out that listing prices are strongly statistically correlated to sales price.  I believe this to be true.  Realtors like to have realistic prices on homes going up for sale and strive to get the owner to select a price approximately 5% to 10% above the projected sales price.  That is good for them because it means that they have a better chance of actually selling a more realistically priced home.

So, if the correlation between listing price and sale price is stronger than the Zestimate price and sale price, then Zillow is correct to dramatically alter the Zestimate by moving it much closer to the broker listed price upon listing.  But, the other corollary is that this is an open admission by Zillow that the Zestimate published by them prior to listing are truly worthless!

If the powers that be at Zillow would like to try to refute this conclusion I would be more than happy to publish it here (so long as they remain factual).

**************update as of 11/30/15 with additions afterwards*******************

Here is a spreadsheet for these two properties above with data to make them current.  The theory of the interpretation of the Zestimate algorithm function changes seems to be gaining strength. I think what remains is to find out the weighting factor for increases and decreases on the spread of the Zestimate from the listing price.

                                Property #1                                    Property #2

Date                                    Total change                                     Total change
                    Zestimate        in  Zestimate            Zestimate         in  Zestimate

3/4/15          1,700,000     (Listed $3.78M)                                                 
8/1/15          3,358,700        +$1,658,700                                                    
9/11/15        3,358,700   (Listing Removed)                                               
10/9/15                                                              1,358,500  
10/28/15      3,358,700       (Sold $3.3M)                    
11/4/15                                                              1,358,500     (Listed $2.495M)
11/9/15        2,973,100           -$385,600           1,914,300          +$555,800
11/17/15                                                            1,917,400          +$558,100
11/18/15                                                            1,922,400          +$563,100
11/24/15      2,895,800           -$462,900           1,926,200          +$566,999 
11/26/15      2,880,799           -$478,000           1,925,700          +$566,400
11/27/15      2,857,900           -$500,800           1,928,500          +$569,200
11/30/15      2,846,200           -$512,500           1,931,200          +$571,900       
12/2/15        2,842,200           -$516,500           1,931,100          +$571,800
12/3/15        2,842,000           -$516,500           1,931,100      (List Reduce to $2.395M)
12/4/15        2,838,400           -$520,100           1,931,800           +$572,500
12/7/15        2,834,700           -$523,800           1,926,700           +$567,400
12/11/15      2,821,600           -$536,900           1,924,000           +$564,700
12/14/15      2,819,800           -$538,700           1,925,800           +$566,500
12/18/15      2,816,500           -$542,000           1,927,200           +$567,900
12/24/15      2,810,600           -$548,400           1,929,200           +$569,900
12/28/15      2,805,400           -$553,600           1,930,200           +$570,900
12/30/15      2,805,300           -$553,700           1,931,900           +$572,600
1/2/16          2,805,100           -$553,900           1,934,500           +$575,200
1/4/16          2,804,100           -$554,900           1,937,100           +$577,800
1/6/16          2,805,800           -$553,200           1,940,800           +$581,500
1/8/16          2,810,500           -$548,500           1,944,400           +$585,100
1/9/16          2,815,900           -$543,100           1,946,600           +$587,300
1/10/16        2,814,600           -$544,400           1,949,400           +$590,100
1/11/16        2,813,200           -$545,900           1,949,900           +$590,600
1/12/16        2,812,100           -$547,000           1,950,700           +$591,400
1/13/16        2,809,400           -$549,700           1,950,900           +$591,600
1/14/16        2,809,000           -$550,100           1,951,600           +$592,300
1/15/16        2,815,000           -$544,100           1,948,700           +$589,400
1/16/16        2,820.800           -$538,300           1,948,900           +$589.600
1/17/16        2,826,500           -$532,600           1,949,400           +$590,100
1/19/16        2,837,400           -$521,700           1,949,900           +$590,600
1/21/16        2,846,700           -$512,400           1,952,200           +$592,900
1/22/16        2,849,900           -$509,200           1,952,300           +$593,000
1/23/16        2,853,400           -$505,700           1,951,800           +$592,500
1/24/16        2,857,100           -$502,000           1,951,800           +$592,500
1/26/16        2,861,500           -$497,600           1,952,400           +$593,100
1/27/16        2,866,100           -$493,000           1,951,200       (List Reduce to $2.249M)
1/29/16        2,865,300           -$493,800           1,950,200           +$592,100 (sale pending)
1/31/16        2,869,200           -$489,900           1,951,000           +$592,900
2/2/16          2,876,100           -$483,000           1,948,900           +$590,800
2/7/16          2,894,700           -$464,400           1,945,100           +$587,000
2/8/16          2,895,300           -$463,800           1,944,800           +$586,700
2/14/16        2,917,500           -$441,600           1,944,700           +$586,600
2/16/16        2,926,000           -$433,100           1,942,200           +$584,100
3/3/16          2,972,800           -$386,300           1,921,400           +$563,300 (sold at $2.225M)

On Property #2 the Zestimate increased to within $564,800 (22.6%) of the listing price, but since the listing price was subsequently reduced the Zestimate of 1,952,400 was within $442,600 (18.5%) of the reduced listing price ($2.395M). Then, the listing price was reduced again ($2.249M) so that the Zestimate is within $297.8M of this new price, so the Zestimate is within 13.2% of the listed price. Finally, the house is listed as pending sold. Once we have the actual sale price we can compute the accuracy of the pre listing Zestimate and the final Zestimate at the time of sale with the sale price.  What is the target that Zillow is aiming for?
Now the results are in. The house sold for $2,225,000 based upon going into contract on 1/27/16.
On that date the Zestimate was 1,951,200. The Zestimate at the time of contract was 12.3% below the sale price.  The Zestimate was $1,358,100 on the day the house went up for sale. So the unadulterated Zestimate was 39% below the presumed "market price". Wow!
We see that for Property #1 above the Zestimate increased to within $420,000 (11.1%) of the Listing price on or around 9/11/15. After the listing was removed for this home (it had gone into contract) the Zestimate has dropped to a low of $554,900 (16.4%).  While the Zestimate of $3,358,700 at the time of the listing removal was within $58,700 (1.7%) of its actual sale price, it is clear that the bumping algorithm worked well in this instance with the objective of Zillow being achieved in getting the sale price close to the Zestimate at the time of the sale.  But it is also clear that the Zestimate prior to the one that did not have the benefit of a professional estimating the listing price was worthless. It was a full 48.5 % below the actual sale price.  And what do we make of the new Zestimate low on 1/4/16 of $2,804,100 which is 16.5% below the actual sale price which was only about two months prior to this date?  This makes no sense. And now again between 1/4/16 and 2/14/16 the Zestimate has increased by $113,400.  That is an increase of 4% in just over 40 days.  And by 3/7/16 it had risen from 1/4/16 the Zestimate had increased by $168,700. That's 6% in two months!                                                                                            

******************update as of 1/2/16*********************************

I have now found some additional examples of the Zillow Bump that should add more fuel to the fire.
First, let me put up the data for consideration.  This is the asking pricing information for this home
It was listed at $995,000 in late June 2015.  In December, after the fourth price drop it was listed at $795,000

Now, let's look at the Zestimate. I do not have complete information on the history here.  It shows that sometime around the time the house was listed, the Zestimate was around $960,000.  There is no record of a Zestimate price for this home shown before that date.  However, this is a subdivision and the other 40 homes in this subdivision all have Zestimates between $580,000 to $708,000. This home does not stand out, so it would be fair to assume that before the listing for sale the Zestimate was around $644,000.  Interestingly, Zestimates for other homes in this subdivision have increased in value consistently about 5.4% during this period of time, in contrast with this home where the Zestimate has diminished in value by about 15.1%, making the variance a whopping 20.5%.

Now, to make this Zillow entry even more bizarre is the fact that the house appears to be listed twice, but only one of them is listed for sale.  So, we have a duplication of the same data, once for the home that is listed, and once for the very same home that is not listed.  The listed home Zestimate is $720,800 and the identical home not listed has a Zestimate of $646,100, about a few hundred dollars off the median for the other 40 homes in the subdivision.  I think this is as conclusive as it is going to get evidencing the true slight of hand being used by Zillow to fudge the Zestimates of listed homes just before they sell to bring them closer to the anticipated sale price to improve their "claim" of Zestimate accuracy. Also, note that as of 1/2/16 the current Zestimate is $65,000 (8.2%) below the current asking price, which appears to be Zillow's best guess at where the sale price will be at this time.  Very interesting, indeed!

Below I am tracking the information on changes to Zestimates for the two variants of this one home:

Property #3
                                 Zestimate           Zestimate            Asking       Listed Zestimate %
Date                       Listed Home     Unlisted Home         Price        Below Asking Price
1/2/16                       $730,000           $644,800            $795,000             8.2%
1/7/16                       $728,100           $644,700            $795,000             8.4%
1/8/16                       $727,100           $644,400            $795,000             8.5%
1/9/16                       $726,600           $644,400            $795,000             8.6%
1/10/16                     $726,700           $644,900            $795,000             8.6%
1/11/16                     $726,100           $644,900            $795,000             8.7%
1/12/16                     $725,400           $644,800            $795,000             8.8%
1/13/16                     $724,900           $645,200            $795,000             8.8%        
1/14/16                     $724,600           $645,300            $795,000             8.9%
1/15/16                     $723,900           $644,700            $795,000             8.9%
1/16/16                     $723,600           $644,800            $795,000             9.0%
1/17/16                     $723,600           $644,700            $795,000             9.0%
1/19/16                     $722,500           $645,300            $795,000             9.1%
1/21/16                     $721,800           $645,000            $795,000             9.2%
1/22/16                     $721,500           $645,100            $795,000             9.3%
1/23/16                     $721,200           $645,300            $795,000             9.3%
1/24/16                     $720,900           $645,000            $795,000             9.3%
1/26/16                     $720,800           $645,100            $795,000             9.3%
1/27/16                     $720,400           $645,500            $795,000             9.4%(sale pending)
1/29/16                     $719,900           $646,200            $795,000             9.5%
1/31/16                     $718,700           $647,400            $795,000             9.6%
2/2/16                       $717,900           $647,000            $795,000             9.7%
2/7/16                       $716,800           $645,900            $795,000             9.8%
2/8/16                       $716,200           $645,300            $795,000             9.9%
2/14/16                     $716,700           $652,200            $795,000             9.8%
2/16/16                        ------               $653,900            $750,000             4.4% (sale recorded)

Currently, there is only one home listed above (Property #2) that is currently for sale (pending) and it has a Zestimate that is 13.6% below the listing price.   Right now I am approximating that the home will sell for approximately 8.9% below the listing price, so that would bring the Zestimates to be about 4.7% below the asking price. Recall that the Zestimate for property #1 above ultimately sold for 1.4% below the sale price.

Property #3 is a bit more difficult to analyze because Zillow had two distinct listings for the same home. I think the only fair way to do this is to look at the two algorithms that they used.
In the first case the Zestimate was was essentially $646,100 before the house was listed, and it sold for $750,000.  This means that the Zestimate was really understating the market price by 13.6%.  But, the artificial Zestimate created after the house was listed was $720,400 at the time that the house became a pending sale. This is an understatement of $29,600 for the market price that it was eventually sold for, or just 3.9% below, meaning that they fudged the accuracy of the Zestimate with this technique by a full 9.7%. Astounding!

 So, it looks like their cooking the data books technique is working quite well for them, pity the poor person that relies on their claims of accuracy.  It may be that the Zestimate target for listed homes is variable by region, or possibly even by price or some other metric that we don't know about.

A final note on Property #3 now that the property has sold at $750,000 please note that the Zestimate is currently $653,900, a full 12.8% below the current market price.  You would think that they might adjust the Zestimate with the new data point.  We will continue to follow this bizarre behavior of this algorithm a bit further.

last modified 3/7/2016

Thursday, June 11, 2015

After Court Battle Equifax Admits that God Exists

As reported in the Canadian Globe and Mail and the New York Daily News, Equifax consents to the existence of God.

"Without a decent credit rating, it’s tough to borrow for large purchases, as a Russian-American discovered.  The New Yorker, owner of a business called Gold Hard Cash, was refused a car loan because rating agency Equifax would not provide financial details on the man.
The problem? God Gazarov was told by Equifax that it “could not process his name as God.”   The suit alleged that an Equifax official told Gazarov it could not provide him or a lender with his credit file "because it could not process his name as 'God' and suggested that he should consider changing it."
After appearing before Brooklyn Federal Magistrate Judge Ramon Reyes, the two parties to the suit struck an agreement, and Equifax will now acknowledge God’s name. He will also receive an undisclosed monetary settlement from the company...
Mr. Gazarov claims his name is not uncommon in Russia, and that he was named after his grandfather. Still, he’s used to the jokes. “My principal in junior high school would walk by me in the cafeteria and say, ‘Oh my God, there he is.’” "
Not to unlike the battle I faced with Equifax over the existence of my address,  but I'll be the first to admit that this was much better than my reported problem.

Tuesday, April 14, 2015

Chase Ink Credit Card Services Suck

On March 6, I contacted Chase Ink MasterCard about a charge on my card from Enterprise Car Rental of approximately $600 for a rental charge that should have been about $75.
Chase Ink told me they would put the disputed amount in abeyance and contact the vendor and that I could deduct the amount from my bill until the matter was resolved.
I was on a business trip last week and noticed on my on-line Ink account that my card was overdue.  I also got a message from Enterprise that they had made an error on my account and that I would receive a credit for approx. $525 since they had made an error.

I called Chase to clarify the situation since my payment should not be delinquent.  I was informed that not only was my payment delinquent, but also that my charging privileges had been suspended.
I explained the information above and that I was traveling on the road and that I would greatly appreciate removing the suspension until I resolved the matter with them when I returned home in 2 days.
They informed me that the first thing was to discuss the matter with the folks in the disputed transactions department. I was transferred to the disputed charges department and I was told that Chase had unilaterally and without notice to me reversed the suspension of the charges associated with the transaction two days after they had spoken to me in March and that there was a late charge of $39 on my account in addition to everything else.  I told them I wanted to get the suspension of charging privileges lifted. They told me I must speak with the customer service department and that they would transfer me to them again.
I waited on hold for 1/2 hour for someone to get to me while I was on the phone.  I gave up and called back.  I spoke to the customer service department and explained the situation again.  They read the notes, found the credit for $39.  They informed me that they could not lift the suspension of the charging privileges.

I usually carry more than one credit card with me when traveling.  In this case I also had my American Express card.  Unfortunately, the magnetic stripe on the back of the card had worn down enough that I could not use the card.  So, I was temporarily without any credit cards in New York City.  A precarious situation.

I have now returned home. I called Chase Credit Card Services.  They have acknowledged again that my disputed charge was not properly handled but my charging privileges would remain suspended until such time as I made a payment to bring my account current by paying for the disputed charges.
I have gone to the local Chase bank branch and explained the situation.  No action so far.
I have now called Chase Credit Card Services and spoken to a supervisor from both the Customer Service Department and the Disputed Charges Department in a conference call.  After about 3 hours of discussion Chase has finally decided to re-suspend the disputed charge, bringing my account current and I will have charging privileges reinstated in two business days. However, I note that it is already time for my next monthly payment, so the matter will, in fact, not be resolved until after I make my next payment.

Thank you Chase for the approximately 10 hours of my time that you wasted on this matter and the suspension of my charging privileges while on a business trip without even a hint that you were going to do so.

Now the plot thickens.  I was waiting the two days for my credit charging privileges to be reinstated by checking my on line account.  After two days, today, the final day for payment, I noticed that while my charging privileges have been reinstated, they show that I still owe them a tidy sum of money that is due by today the latest.  Now, if I had not looked on line, I suppose I would have become delinquent again and they would have suspended my charging privileges in another few days.

A call back to Chase has confirmed by deepest fear.  No one can explain the charges, Yes, the disputed charges are still suspended.  I called my local branch again.  They called Chase Credit Card Services for me.  After another few hours on the phone it became apparent that I had two choices.
1. not pay the sum that I didn't owe and incur late charges and card suspension, which would be reversed (so, they say) if I were to call them in a few days, or
2. pay the sum they demanded and that in a few months this would all work out.

I don't like being put into this kind of a situation. What I don't like is the fact that the very same kind of suspension of charging privileges would have occurred again, without any notice to me beforehand about the situation and the fact that their system has a glitch in it.

Sorry, JP Morgan Chase, I will find another credit card company with which to do business.  In fact, I will find another bank to do business with.
9/6/15 Update.
Yes, in fact, I now have a new credit card, but I thought it necessary to explain what else has happened in the meantime.  I got a notice from Chase that they were cutting my credit limit in half. No matter, I will not be using it. I am switching everything out of Chase.  My only reason for staying right now is to cash out my rewards points.
I just looked on line and Chase has me with four credit cards with outstanding balances on all.  Sorry, I have only one account.  What is this?  I called Chase to find out that they cannot recognize me because I could not answer the security questions correctly. I have to go down to a branch and identify myself before they will deal with me.  Done that. I have no idea what their problem was.  I spoke to the billing department about the 3 phantom credit card accounts.  They say that they have been having problems with their on line system lately.  I should say so.  Chase cannot get their act together.  I cannot chance this kind of screw up, especially on business trips.  Good bye Chase.

Monday, January 12, 2015

Abuse of Power by the Police

CHP Officer R Torres (ID 14455)
Recently, there have been a spate of reported abuse of power incidents by police.  We have the incident in Ferguson MO and the one in New York City, just to mention a few. Police abuse does not have to be racial, and it doesn't have to be physical.  Please read the following incident and decide for yourself if there is a problem of abuse of power by police

On a midweek day in September of this last year, at approximately 11:05 am my wife and I were in our son’s parked vehicle in a construction zone just off an exit of US 101 in Petaluma CA. I was the driver. My wife was in the passenger seat. The car’s engine was not running. My wife and I are respectable looking and were dressed well and we were in a fairly new vehicle. There was nothing suspicious to provoke a police inquiry, except, perhaps, that we were on the side of the road and that motorist assistance would have been a good reason for the police officer to approach the vehicle.

CHP Officer R. Torres (ID 14455) approached the vehicle on a motorcycle from the front of our vehicle on the driver’s side and inquired as to what I was doing.  I indicated that since I was not from the area and unsure of the way to the location we were attempting to go that we had pulled over to the side of the road.  The officer asked for the driver’s licenses for both myself, the driver, and my wife, the passenger, and for the vehicle registration. Upon inspection of their driver’s licenses he noted that both of us were from out of state, and then inquired as to who the owner of the vehicle was since it had CA plates.  I indicated that the vehicle is owned by our son, who we were visiting and who lives in CA, and that we had borrowed the car from him. The last names were both the same.   All documents requested by Officer Torres were provided to him promptly and we were very polite.  Officer Torres indicated that the vehicle should not have been parked in the construction zone.  He also noted that my wife did not have a safety belt fastened and issued her citation for violation of VC 27315 (e) --passenger not wearing a safety belt.

At all times from the time the officer saw and approached the vehicle until the time that the citation was issued, the vehicle was in a stationary position, located off the road, and with the engine not running.

VC 27315, the CA seatbelt safety law, is an important and useful law that was enacted to protect motor vehicle drivers and their passengers. Both my wife and I believe that the law, as enacted, is appropriate and we wear seat belts when traveling in a vehicle on the road.  I still had my safety belt on at the time Officer Torres approached.  My wife uses her safety belt whenever she is either a driver or passenger within a moving motor vehicle on the road.

In this situation, the prerequisite conditions necessary for the issuance of a citation were not present.  The vehicle was not on the road, it was not moving, and the engine was off.  Upon pulling off the road and stopping the vehicle my wife had merely removed her seat belt to have enough flexibility to reach a roadmap which was located in the back seat of the car.  The removal of the safety belt occurred while we were stationary, off the road, and with the engine not running.  If the law were intended for this type of situation then any driver or passenger entering a vehicle and sitting in that vehicle in preparation for driving or to be transported in that vehicle would be in violation of the code until such time as they got their seatbelt fastened before the vehicle was actually started and moving.

Also, on the citation document itself in the box labelled :”Speed Approx.” is the symbol “S”.  If the symbol “S”, as we suspect it is, presumedly meaning “Stationary” or “Stopped” it further confirms the facts.

To add insult to injury, Officer Torres, upon noting that our state of residency was very liberal on gun laws, said that for all he knew we had a trunk load of guns, but that he was not permitted to ask us to open the trunk without further suspicion.

Okay, it wasn't even a parking ticket, but the fine in CA for this offense is about $175. We decided to go to court and protest the ticket. In court my wife stated her case, reciting all the facts above. The judge dismissed the case. But, Officer Torres won in this case. We had set aside an entire day (December 30) that we could have been with our family for this matter. In fact, it only took us about 5 hours to and from the court, not counting the time to prepare what was going to be said. We traveled almost 100 miles round trip, not to mention the stress of a court appearance. How fortunate that we could be with our son at Christmastime so that we did not have to travel more than 500 miles to answer the complaint.

Shame on you Officer Torres. You should be reprimanded by your supervisors for this. You knew that the offense would not hold up. In the best scenario for him we would have not contested the citation and paid the $175. Do the police in CA have a quota?

Anyone else being harassed by the California Highway Patrol in California