Von Maur Discriminating based on age

[beb86]

According to http://www.addleshawgoddard.com/view.asp?content_id=5510&parent_id=5507

"The Government has announced that new rules banning age discrimination in the provision of goods and services will come into force in April 2012. A consultation has been launched on proposed exceptions that will allow differential treatment based on age to continue in relation to specific products and services. In relation to financial services, the proposal is that providers still be allowed to use age when assessing risk and deciding prices, where the use of the age is based on relevant information from a source on which it is reasonable to rely."

There you have it and IN THE WORKPLACE 40 and over is a protected class per the EEOC

[Walt_K]

I'm not an expert on age discrimination by any means.  But often times discrimination is not per se illegal.  Even race based discrimination which is subject to strict scrutiny can sometimes be upheld depending on whether the law is justified by a compelling government interest, is narrowly tailored, and is the least restrictive means of accomplishing the task.  IIRC age discrimination doesn't even fall under intermediate scrutiny.  I think it is just rational basis review.  That's a pretty loose standard. 

We're talking about private actors here, not government actors, so the tests are probably somewhat different.  But it wouldn't surprise me if they are related.  Under a rational basis type review, you'd just cite to the stats on increased accidents for drivers under 25 and the strong interest in public safety, and I'd imagine you'd be home free. 

[vizon]

BACK on topic, this is about a Von Maur credit card not rental vehicles.

I thought Amex was just dinged for this, can anyone explain to me the differences? As for the "everyone under 21 must provide written app" I have never done so and opened 2 cards this year.. as well as got an auto loan. Never was asked by anyone in my life for income info but my apartment complex. I am genuinely confused as to where this is coming from.

[Croselx]

If you lived in PR you'd flip. Here you are a minor until age 18, but in some casesuntil age 21 and as a minor you can't:

buy cigarrettes (you can buy liquor at 18+ and you can also go to casinos and pubs which is odd)

get a car legally in your name, even if you buy it (may be the same for a house, but not sure)

get into any sort of contract (employment contracts allowed after age 18)

due to above: can't get a loan (need co-signer always even if you can show that you are able to pay or have a cd as collateral)

get any health care, you need to be with parent or guardian until 21 for any treatment

rent a car (requirements for rental: age 21+ and a credit card with enough balance to cover deductible, a small deposit and total rent which is 500-600+) >

< in my experience you only get charged a little more on insurance and not on the actual car and you are restricted on which car you can rent (no sports car or high end, wierd though that you can rent a truck if you have the licence and a truck is often times more expensive than a typical sports car)

Most of the above is just plain stupid if you ask me.

As for the age discrimination thing; I can see a rental company charging more to younger drivers to discourage them from renting as younger drivers (being less immature and inexperienced) often times do stupid things = higher risk of damage and pain in the rear for the company. If I were an insurance company and a rental company constantly makes claims of accidents I would first try to find the reason behind it (ex: younger drivers usually have more accidents and young drivers are the root cause), try to minimize risk (higher fees or limit the vehicles available to rent  to discourage said demographic, cheaper to replace a yaris than a mustang) and if this doesn't work, drop said company. Is it legal, moral, fair? That depends on who you ask, a company just cares about making money with the least amount of problems/issues and isn't in business to lose money.

EDIT: You also have to provide verification of income and identity for any kind of CC that is backed by a major bank here, they ask the same amount of paperwork as if it were a personal loan.

[Walt_K]

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@vizon wrote:

BACK on topic, this is about a Von Maur credit card not rental vehicles.

I thought Amex was just dinged for this, can anyone explain to me the differences? As for the "everyone under 21 must provide written app" I have never done so and opened 2 cards this year.. as well as got an auto loan. Never was asked by anyone in my life for income info but my apartment complex. I am genuinely confused as to where this is coming from.

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Same reasoning applies to credit card.  Younger applicants are riskier => ok to require additional documentation.  Von Maur's policies don't have to mirror other credit issuers. 

The reporting on Amex's problems stated that Amex was using age in their scoring system and that ECOA requires scoring systems that take age into account to be properly designed and implemented.  That doesn't mean they can't take age into account, just that it has to be done "properly".  I don't know what the ECOA standards are for properly designing and implementing an age based scoring system, nor what Amex's problems were.

[Dustink]

My first credit card was the only hard one, but I got a banker to push it through for me. Had to try a few branches first before I found that banker. No written app and no income verification. The banker convinced underwriting that I demonstrated a means to repay the debt via the accounts I held with them.

After I had the one card on my report, I had no problems obtaining new credit online. Never had to verify anything.

[Dustink]

Generally discrimination works like this. You are not allowed to discriminate against the minority, but you can discriminate against the majority.

So you can discriminate against the young, but you can't against the old. You can discriminate against non-immigrant white people, but not against a minority.

[cashnocredit]

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@Dustink wrote:

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@cashnocredit wrote:

The CARD act requires a written app if you are under 21.

The idea that it requires pay stubs or some other "verification" is widely believed and endlessly restated but it is wrong.

It doesn't actually require income "verification" beyond simply putting down your income and/or assets indicating an ability to make payments. Banks can choose more extensive "verification" but it is up to them. For people over 21 it doesn't even require that, though it does require something, even if it's just a statistical evaluation of a credit file that indicates a capacity to make payment.

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I think the phrasing is something along the lines of "demonstrates an independent means of repaying the debt." As in, has a verifiable job via pay stubs or other verifiable means.

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Please read the linked document which reviews both existing regulations and proposed changes. When an applicant specifies either "salary" or "income" without qualification, that is sufficient to meet the CARD act. This is the current requirement and is under review and changes are proposed to expand access to some other spousal income for non-working spouses over 21.

On March 18, 2011, the Board issued a final rule amending § 226.51(a) to apply the independent ability-to-pay requirement to all consumers, regardless of age (March 2011 Final Rule). The Board adopted this change, in part, in response to concerns regarding card issuers prompting applicants to provide "household income" on credit card applications.

There is no additional "verification" burden imposed on under 21 peeps.

http://files.consumerfinance.gov/f/201210_cfpb_CARD-Act-proposed-rule.pdf