HSBC has gotten a little aggro lately – an analyst dispute widely reported in the FT
and other places. By the standards of the story I am about to tell you the behaviour is quite genteel.
I know relatively little about HSBC. I thought they paid an absurd amount for a Taiwanese bank I understood really well. I later met the guy who was responsible for the purchase and decided that I knew far more about the target than him. Fortunately I was not short the target.
I never much liked Household (indeed I lost money betting that HSBC might come to its senses and not consummate the Household deal.)
I also had a fairly aggressive argument once with a colleague who wanted to buy HSBC. But realistically I only knew about a few cockroaches and I wasn’t sure whether the place was infested.
This post is about a really nasty cockroach. I will leave determination as to whether this is an infestation up to my readers.
The Bally Total Fitness scam
Bally Total Fitness was a favourite of shortsellers. I sold it short myself and made good coin. It was a simple scam.
The company ran gyms which had seemingly attractively priced memberships. Running fitness centres is a notoriously tough business. Anyway these seemed to work – at least in an accounting sense.
In fact the company scammed the customer. Customers thought they were signing a month-to-month gym membership – but – and I am not joking here – they were signing a loan document – and there were huge penalties for not paying. The documents were often non-cancellable. The customers were misled.
There was a website called ballysucks.com (now defunct) which told the story
. They were sued by Bally and lost. The story can still be found here
amongst dozens of consumer rip-off reports on the web.
Bally managed to report not only overdue fees (for which the customer had falsely been induced to agree) as receivables – but they included penalties as per credit cards.
Obviously collection was a problem. Bally filed bankruptcy.
So what has this got to do with HSBC?
Well the Bally scam required a collection process. It required thugs to go chase the delinquent “loans”.
HSBC provided the thugs – and surprisingly – given the thuggish nature of the activity they have never been pulled apart in the financial press for it. They didn’t doing it using the glamorous HSBC name. No it was Orchard Bank. They used to ring up the customers and say they were a partner
of Bally. Sometimes HSBC purchased this debt (according to Bally at par) which suggests that their due-diligence was lacking.
They were the debt collectors for Bally’s fraudulently obtained loans. Standover men if you will.
But I will use the word of the HSBC/Orchard debt collectors. They were “partners”. Indeed the partnership extended more widely and there were over 100 thousand credit cards issued by Orchard to Bally customers.
Do you judge someone by their partner? In this case it was Bally’s customers who were "consummated" in the relationship.
Gotta love automated ad placement. The one I got on this article:
Free Bally Membership
Join National Body Challenge & Get A Free 30-Day Bally Membership!
I get the same sort automated add placement... try this:
Solve Your Pest Problem Fast. No Mess Or Smell. Free Online Quote
There is no such thing as "one cockroach."
I'm not sure if I joined Bally's before this scam, but I've never had a problem with them. $12 a month is a fair price.
Now HSBC, that is another matter entirely. They also own Yamaha Credit (for motorcycles and ATVs) and jacked my rate from 8% to 24% for a claimed late payment, when an autopayment didn't go through as scheduled. This after 5 years of on time payments.
They were unwilling to do anything to get it back to reasonable rates.
They are bandit-rapist-pirates of the worst (banker) type and I sincerely hope that bad things befall them and perhaps the go the way of Lehman.
Gold bugs also hate them, as they are the little brother to JP Morgan in the ongoing manipulation of the world gold price via COMEX, if you believe the theories of GATA, which more and more people (including me) do.
You should link your cooking blog on the front page here. I've been reading this one for since the summer but just discovered the other once. Sounds de-lish.
It seems that this page will pretty soon be the internet authority on cockroaches the way the expensive Baltic hookers article did. Here is my auto ad (even geographically targeted the way yours was):
Call Us For Cockroach Extermination Services At Competitive Rates!
I was hoping for a "rebuild your credit" card offer from Orchard Bank, "all applications accepted." (most approved, I am sure, at 29.99%, $500 deposit, $10 monthly fee on a $250 line).
The business model of a gym is to sign up like 20,000 members per facility and hope that only 500 show up regularly.
The funny thing about this story, is that the whole Bally thing, came about over 5 years ago. HSBC didn't obtain Orchard, which was a part of Household at the time, until after the whole ideal with Bally was already basically done and over with. Hsbc wasn't even there when it happened, yet gets a mark on its name because of fools that didn't read through a whole agreement, and took out the credit without fully understanding what they are getting themselves into. What should be done is teaching kids in school about credit. There should be an instructional video, sent with a card, or watched at time of application, as well as a credit iq test to make sure the applicant understands.
For anyone who wants to know how low Bally's will go to hire parasites, simply google: riadh hamdi. Enough said.
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