Posts Tagged ‘Softbank’

Collecting organizations try to give credit where it’s due, don’t always succeed

Thursday, November 7th, 2013

In a recent series on credit information reporting, the Asahi Shimbun explained the plight of a young Kanto woman who had applied for a credit card last March. The card she was interested in offered discounts at selected stores and could be used as an IC card for public transportation. It also had an attractive point system. Almost all her work colleagues had the card and since her financial particulars were the same as theirs she didn’t think she’d be turned down, but she was and the rejection confused her. She had one other credit card, which she had always paid on time. When she called the credit company that refused her they said they couldn’t give her the reason for the rejection.

A gift campaign notice that comes with a monthly credit card statement

A gift campaign notice that comes with a monthly credit card statement

Then she received a letter from Softbank Mobile, her cell phone service carrier, which said that due to a mistake her payments had been reported to a credit information (CI) company as being delinquent. The period of her false delinquency, she realized, fell during the same time that she applied for the credit card. In the letter Softbank said that it had corrected the mistake with the CI company, and when she applied for the card again after a while, she was approved, but when she tried to find out why they had changed their mind the company again said they couldn’t tell her.

Such situations are not uncommon, but since credit card companies are not obliged to give reasons for rejecting or accepting customers, most applicants have no idea that these problems even exist until it’s too late.

In Softbank’s case, the carrier was actually alerted to the “mistake” last March when customers pointed it out to them. The company investigated the claim and found that between December 2012 and March 2013, about 63,000 customers were reported to credit information companies as having been late with their payments, even though they hadn’t been. The reason for the mistake was fairly complex, and common enough for such a reporting system. All of the affected customers, including the woman profiled by the Asahi, had purchased their terminal devices — meaning their cell phones — through a revolving credit plan. Moreover, they accumulated points over time that could be redeemed as credit through the revolving payment system.

Softbank reported all this information to the relevant CI collecting company, but because of a computer programming redesign that took place late last year the settings that translated points into credit did not work correctly, so people who had paid for their cell phones through points were incorrectly flagged as being delinquent as far back as 2009.

When a financial institution screens someone to determine if the person is credit-worthy, they use CI from various sources: the Credit Information Center (CIC), which mostly works with credit card companies and revolving payment plans; the Japan Credit Information Reference Center Corporation (JICC), whose members are consumer loan outfits; and the Japanese Bankers Association, which collects information related to bank loans. When someone applies for a credit card or a loan the institution requests credit history information from the relevant organization. All lenders and retailers who offer revolving payment plans are obliged by law to report credit histories of customers to one of these CI organizations.

CI includes personal data, such as name, address, birthdate and nature of the transaction; as well as “payment information,” including payment trends and the balance of the account. As long as the customer pays on time, no information is recorded, but when the customer misses a payment the CI collecting company receives a notice of there being an “unpaid situation.” If that situation continues for 3 months straight, the payment situation is reported as being “irregular,” which means the customer is placed on a blacklist.

Being on a blacklist does not necessarily mean that the person will lose his or her credit card or be denied a loan. The financial institutions who request this information for screening purposes can interpret it however they want, but generally if an irregularity is persistent the person’s credit history will be tarnished. Information about irregularities stay in the customer’s credit history for five years, even if the loan or credit bill has been paid off. However, if the irregularity is the result of a mistake on the part of either the company reporting the credit information or the company collecting it, then it is immediately removed from the record.

The problem is that often such mistakes don’t come to light, and while credit reporting companies and lending institutions or credit card companies are not obligated to reveal reasons for rejections to applicants, the credit collection companies are. For instance, if you have a question about your credit card history you can call CIC and, for a fee (¥500-¥1,000), they will give it to you. It’s the same for the other two organizations, depending on where you have borrowed money. An expert in the Asahi article recommends that anyone planning to take out a large loan check beforehand with CI collecting organizations to find out whether or not there may be problems.

The Asahi also reports that an increasing number of young people are showing up on blacklists due to their phone bills. CI, it should be noted, has nothing to do with paying utility bills, a matter that is strictly between the utility and the customer. In the case of cell phones, CI is only reported on people who have bought their phones through revolving payment systems, which are usually attached to phone bills.

The problem here is that many young people forget that they are paying back money loaned to them for their phones. They think that they are paying their phone bill, so if they’re late with a payment they simply have to pay a small penalty. They don’t realize that their credit history is being damaged in the process. In many cases, in fact, it is their parents’ credit history that’s being damaged, since some parents cosign for their kids’s cell phones. It gives them more reason to monitor their cell phone usage.

Only chumps recharge their cell phones at home

Saturday, May 14th, 2011

A popular and long-running theme on variety shows is zero-en seikatsu (no-yen living), an idea that goes beyond mere frugality to embrace a sort of charismatic philosophy. Since the March 11 earthquake and the attendant electrical power crisis, adherents of the zero-en lifestyle have been promoting the fact that sales outlets for the major mobile phone carriers all offer free battery-charging services to customers. Recently TV Tokyo’s “Sunday Big Variety” profiled a female office worker who makes a fairly good side living clipping coupons and taking part in product promotional lotteries, but the aspect of her no-spending lifestyle she was most proud of was the fact that for the last five years she hadn’t spent a single yen to recharge her phone.

DoCoMo recharger with locker.

Some people have to recharge their phones every day. How much does that normally cost if you do it at home? A number of Japanese bloggers have wondered the same thing. Apparently, it requires up to 10 watts of electricity per hour to recharge a cell phone, and the fee for household electricity is about ¥20 for 1 kilowatt per hour. Therefore, if it takes, say, four hours a day to recharge your phone, you will end up spending between ¥2 and ¥3 a month to do so. So that means the zero-en woman on the TV Tokyo show has, over five years, saved about ¥180.

To most people that won’t mean much, and for sure the providers don’t offer the recharging service for that reason. It’s mainly for busy people who need an emergency recharge when they’re not at home, and in that regard it’s a real life saver since the alternative is buying one of those clunky, expensive supplemental batteries in a convenience store. Nevertheless, the employees of the service providers don’t seem to know exactly how long it takes to recharge a cell phone. We went to several service centers that offer recharging and asked the employees how long it takes to recharge from zero, and only the DoCoMo staff was able to come up with a consistent, credible number: 2 hours. An au representative told us she didn’t know how long it took but most customers spent 30 minutes; while Softbank said only 20 minutes.

DoCoMo’s recharging service is slightly more elaborate in that it even offers juice for Mova models, which have been discontinued. They also have little “lockers”: If you can’t hang around while your phone is recharging, you can place it in a locker with a combination lock while it’s doing so and come back later. And if you want to copy data from one phone to another, or from your phone to another storage medium, like a CD, they have devices that will do that for free, too. Some service centers of DoCoMo and Softbank even have free beverage services while you wait. I’m sure that’s a big lure for zero-en tribe; even if the coffee tastes like mud, it doesn’t cost a thing.

Kids are all right at Softbank

Wednesday, February 3rd, 2010

What? No iPhone for Taro Junior?

What? No iPhone for Taro Junior?

Softbank Corp. announced on Tuesday that its profits for the first three quarters of the current fiscal year rose 63 percent over the same period in fiscal 2008. Nice going in this particular environment; which automatically raises the question: What is the company going to do with all that money in terms of the people who work for them?

Actually, Softbank and its group companies — Softbank Mobile, Softbank BB and Softbank Telecom — have a corporate policy that stresses the importance of its employees’ lives while addressing social problems such as the declining birthrate. That’s why Softbank introduced the shussan iwai-kin (birth celebration money) system some years ago and even upgraded it in April 2007. With this system, full-time employees who have worked for the company at least one year are given a bonus of ¥50,000 when they have their first child, ¥100,000 when they have their second child, ¥1,000,000 for the third, ¥3,000,000 for the fourth, and ¥5,000,000 for the fifth.

So far there has only been one employee who has scored the jackpot with a fifth kid, but since 2007 there have been 12 who have claimed the ¥3,000,000 bonus with their respective fourth offsprings. There are other companies that also offer bonuses for babies, but I can’t find any that provide these big payouts for fourth and fifth births.

Pretty sweet, and certainly a good reason to stay with Softbank if you’re planning a big family. But how is Softbank in terms of maternity and paternity leaves, which is another gauge of corporate concern for employee welfare? A closer look at the company’s home page revealed this:

Continue reading about family-raising perks at Softbank →

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