Academic journal article Academy of Marketing Studies Journal

Campus Stalker Rapes Students of Their Financial Dignity: A Review and Strategic Ethical Framework for Credit Card Company Marketing Practices

Academic journal article Academy of Marketing Studies Journal

Campus Stalker Rapes Students of Their Financial Dignity: A Review and Strategic Ethical Framework for Credit Card Company Marketing Practices

Article excerpt


This manuscript identifies the realities and risk factors faced by marketing managers of credit card companies and urges them to consider the role of consumer sovereignty in the design and delivery of ethical marketing programs. The inherent risks of targeting to the college student market are discussed as they relate to legal standards and consumer sovereignty status. A theoretical framework is presented for marketing program risk assessment and a marketing program risk assessment tool is given to help marketing managers see their marketing programs from an ethical and risk minimizing perspective. The premise of this paper revolves around the importance of establishing the nature and degree of consumer sovereignty present in any target market before (re)designing and implementing marketing strategies geared to it. Assessing the level and nature of consumer sovereignty is paramount to the ultimate design and risk minimization of ethical marketing strategies. The risk assessment tool provided may help marketing managers prioritize the type of information to be gleaned from the college student market and in the subsequent provision of appropriately thought out strategies, avoid costly lawsuits and negative publicity in the future.


As Jeff passes by the MBNA Career Center on campus, which is named after the credit card company that he owes several thousand dollars, the irony of his "catch-22" situation is not lost on him, "how can I pay them back when their credit reports are hurting my chances of getting a good job!" It is not surprising that growing numbers of students like Jeff are increasingly using sexual analogies in describing their unforeseen circumstances, denouncing the predatory policies of the credit card industry as a form of "financial rape."

Significantly, the most striking feature of the ongoing furor over predatory marketing to college and high school students has been the adamant refusal of the credit card industry to publicly acknowledge any culpability. (Manning, 1999a)

Profound changes have occurred in the credit card industry since its deregulation in the late 1980s. These changes have been enhanced by the technological advancements of the 1990s, enabling easier access and response to the consumer markets. As a result, with more lenders entering the credit market, the credit card industry has become a very profitable and yet, increasingly competitive environment leading to a saturation of the traditional target markets. The saturation of these traditional target markets has led to identifying the students market, college and high school students, as the last untapped segment which holds promise for sustaining the profitability of credit card issuers.

The competitive arena that credit card issuers have found themselves in, both in the traditional and nontraditional markets, has spurred these marketing reactions: (1) heavily stimulating the uses of cards such as by encouraging cardholders to use them to pay for groceries and other basic necessities; (2) suspending the traditional criteria for cardholders and offering large amounts of easy credit to college students who have no credit experience or familiarity with the credit world; (3) adjusting downward the minimum monthly payments (e.g., 2.0 percent, 2.5 percent); (4) lowering minimum monthly payments and not indicating the consequences of making minimum payments; (5) encouraging college students to apply for and use credit lines that are beyond their ability to pay; (6) offering pre-approved credit cards to students without establishing pre-approval status; (7) offering premiums, discounts, and promotions to sign up for or use a credit card; (8) establishing credit limits that exceed the student's monthly income; (9) approving credit limits without considering how much is owed on currently held cards and its relationship to their monthly income; and (10) not clearly informing the cardholder of the total finance charges if minimum payments are made or a payment is made late (Committee on Banking and Finance and Urban Affairs, 1995). …

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