Banks back off on calls Sept. 11

http://www.delawareonline.com/newsjournal/business/2002/09/07banksbackoffonc.html

Banks back off on calls Sept. 11
Solicitations, ads will stop for a day
By JONATHAN D. EPSTEIN
Staff reporter
09/07/2002

The nation's credit card industry won't be calling consumers to solicit new business or to collect on debts on Sept. 11, holding back their vaunted marketing and collections punch as the nation remembers last year's terrorist attacks.

Major credit card issuers spend billions of dollars a year on telemarketing efforts, including mailings, phone solicitations and other means. But Citigroup Inc., MBNA Corp., First USA Bank, FleetBoston Financial Corp. and other banks said they won't do any telemarketing on the anniversary to avoid angering consumers.

"People are going to be remembering what happened, and they are not going to appreciate a telemarketing call on that day," said FleetBoston spokeswoman Deborah Pulver. "We want to stay in people's good graces. We don't want to be the bad guys calling them up and bothering them."

Credit card banks, automakers, communications companies and other businesses also will hold a range of special commemorations for employees to mark the day.

Banks are the largest private employer in Delaware, with more than 32,000 workers, mostly in credit card companies. Seven of the nation's top 10 issuers are based in or have operations in Delaware.

Credit card issuers have been facing some of the highest delinquency and write-off rates on loans in years, putting added pressure on them to collect debts that are past due. But many banks said they also won't call delinquent borrowers that day - or at least not those in geographic areas directly affected by the disaster. That includes metropolitan New York City and Washington, D.C., and southwestern Pennsylvania, as well as surrounding areas.

"We're being very careful about how we're handling all of this," said Beth Metzler, a spokeswoman for Discover Financial Services, which is a subsidiary of brokerage firm Morgan Stanley Dean Witter & Co. Morgan Stanley was the largest tenant at the World Trade Center, but lost fewer than 15 of 3,700 employees.

Withholding calls probably won't help the companies get new business, but it won't hurt them either, marketing experts said.

"I don't think it's going to benefit the companies, but I think someone got the idea that it could hurt companies if they were perceived as ignoring a day that had become special to many Americans," said Meryl P. Gardner, University of Delaware professor of marketing. "If you don't refrain, you'll be seen in a bad light."

Some banks do even more

Some banks are going a step further than silencing their phones for the day. Cross Country Bank of Wilmington and its Glen Mills, Pa.-based servicing affiliate, Applied Card Services, will close all operations on Wednesday. The two card companies, both owned by Wilmington native Rocco Abessinio, employ 4,500 at operations centers in Pennsylvania and four other states, as well as about 50 at Cross Country's headquarters in Delaware.

"We're just shutting down completely. We thought that was the appropriate thing to do," said Paul C. Seitz, executive vice president and chief financial officer of Cross Country, which lends to borrowers with bad credit.

Corporations 'stay quiet'

Corporate America is treading gingerly on the American psyche next Wednesday. Companies ranging from General Motors Corp. and J.P. Morgan Chase & Co. to both Cingular Wireless and Verizon Wireless are withholding all advertising as well as any other activities that might appear in bad taste with the somber tone of the day.

"We're going to stay quiet on the 11th. We're going to lay low," said Ryndee Carney, a spokeswoman for GM, parent of Saturn Corp., which operates the L-Series plant in Newport. "We think that's going to be a sensitive day for many Americans and we think it's more respectful to be quiet."

Companies besides credit card banks - including cable giant Comcast Corp. of Philadelphia and New York-based Verizon Communications Inc. - also plan to shutter telemarketing calls that day.

"Sept. 11, at least now and for many, many years to come, will probably be kind of a memorial day and remembrance day," said Eugene Fram, professor of marketing at the Rochester Institute of Technology. "On remembrance days, it's important that your actions are consistent with what is taking place. If it's inconsistent, then it can cause you a lot of problems."

But the lack of any credit card telemarketing or collections is perhaps more remarkable because of the degree of competition in the industry, the size of such operations and the need to recoup potential losses, some industry observers said.

For example, MBNA, the nation's second-largest issuer, has 19 telemarketing facilities in 11 states, with 4,200 mostly part-time workers as of the end of last year, according to its annual report. Last year the company spent $269 million on advertising and $354 million on postage and delivery.

"This is an important story that shows even big business has a heart," said Christopher Keenan, director of marketing for credit card consulting and advertising firm De Novo Corp. in Hockessin. "It is only appropriate not to utilize that day for marketing."

Commemorations vary

Commemoration plans for the one-year anniversary vary from company to company, but many plan moments of silence at 8:46 a.m. - the time the first plane hit the World Trade Center. J.P. Morgan, the nation's second-largest bank and the fourth-biggest credit card issuer with 3,800 employees in Delaware, also plans a second moment of silence at 10:29 a.m., when the second tower collapsed.

Others, including GM and FleetBoston, plan to fly flags at half-staff, hoist banners or give out memorial pins. FleetBoston and Verizon also will allow employees to dress casually in red, white and blue.

Still others will remember the anniversary not only on Wednesday, but in the coming weeks. FleetBoston has dedicated all seven of its volunteer events in September to the memory of victims. MBNA is changing the name of the NASCAR Winston Cup race it sponsors later this month to the MBNA All American Heroes Race - though just for this year.

Reach Jonathan D. Epstein at 324-2880 or jepstein@delawareonline.com.