Some of the issues discussed in this thread evolve quickly, or may be highly situational. As a consequence, problems that appear to result from negligence may be difficult even for reasonably conscientious people to avoid.

For example, overdraft of a bank account may have been more difficult to predict in some periods than others. When I was younger, I was payed by check (direct deposit was not available from some of my employers), I payed my rent with a check, had automatic bill pay for a small utility bill, and used a debit/check-card to buy food and sundry necessities. The timing to post these transactions was inconsistent; the time to clear the checks varied, and the auto bill pay occasionally failed. One month my rent check cleared quickly, but my paycheck took a few days. I bought a small amount of groceries with my checkcard, which authorized, but overdrew my account by a few dollars. It was not my intent to overdraw my account, and I thought that “authorized” meant that sufficient funds were available. Even one or two NSF or overdraft fees would not have been a huge problem, but because the bank reordered transactions from largest to smallest, I had several hundred dollars in bank fees which consumed my income for the rest of the month.

The account was free, and as far as I can understand and recall, the transaction reordering was mandatory, and “Overdraft Protection” was offered as a value added opt-in service for higher cost account types. I made at least some effort to understand the account documentation I was given when I signed the contract, but I failed to understand that transactions were reordered, let alone recognize the risk implications of that policy. When I told my dad about this story, he thought it was just a mistake, and that the bank might fix it if I called them. He hadn’t found out about transaction reordering because he had ample savings since before it was invented.

Another example: prepaid cellphones were extremely expensive at that time and place, pay phones were disappearing, and I was not able to have a home phone for practical reasons (moved too much, installation delays, not on the lease, etc). I needed a contact phone number for employment reasons, and I accepted a contract cell phone plan because it was so much less expensive then prepaid.

The contract plans available changed occasionally, and to save money I changed my plan a couple of times; eventually, I was erroneously told by an agent of the provider that unlimited “off peak” hours of my plan began at 7pm, but in fact they started at 8pm. My efforts to cut my expenses resulted in a surprise bill for several hundred dollars. I couldn’t even take my business elsewhere because the contract had a deposit and a $500 cancellation fee. (In general, I have learned to suspect that when services are predicated on a mandatory line of credit, it is in order to drive up consumption using price obfuscation.)

I’m offering these as examples of cases where consumers must make a poorly understood cost/risk trade off in order to access basic financial or utility services. It seems to me that this disproportionately affects people with less money because they are more price sensitive and less resilient to unexpected costs.

The rules and conventions tend to change overtime, so depending on our circumstances we might have no idea of the details of these kinds of problems as they exist now if we aren’t having them. Since I can now easily keep several thousand dollars cash in a back account, I wouldn’t know first hand about transaction reordering if it had been introduced more recently. Similarly, the pricing structure for phones has changed completely since I had “bill shock”, and I can now easily afford more service then I ever use in any case.

A few members of my extended family grew up poor enough to have serious problems securing food and housing; sometimes they lived in a barn and survived on wild game. These options were totally unavailable to me when I needed them. They are now middle class retirees, and they have no more current experience then I do with the kinds of financial issues discussed here.

A couple of years ago, an acquaintance of mine who lost his job was advised by his grandmother to try selling oranges by the freeway. He was an adult man with bills to pay and an estranged family – his grandma offered a simple, well meaning suggestion that demonstrated her total misapprehension of the nature of the problem. If my experiences with financial distress are not in the same place and time as another person, I assume that I am probably somewhere on the knowledge spectrum between that person, and my friend’s grandma.

The point I mean to make is that if people seem to have problems that could be trivially avoided, it could be due to negligence, or it could be that we don’t fully understand the problems.