Wednesday, July 16, 2014

Did old friend deserve a drubbing for his shady business practices?

How honest should you be with old friends when you find their business dealings objectionable?

Recently, a reader was contacted by a high school classmate letting him know that he'd be visiting the reader's hometown, had some free time, and wondered if they could get together. It had been more than 20 years since the two had seen one another. Aside from a very occasional email over two decades, the two not stayed in touch.

The reader admits that he made no special effort to stay in touch with his old friend, since previous contacts had usually involved requests for favors that proved time consuming. He had never considered the former classmate someone he'd ask for anything in return. In spite of this, he told his classmate when he'd be available and that if the time worked out for both of them, he'd be glad to get together and catch up. They set a time to meet for lunch.

While he was suspicious that the classmate might want a favor, it turned out that the meeting simply involved a pleasant conversation about mutual friends, their families, their careers, and filling in the gaps in their lives since they'd last seen one another. No favors were asked or seemed forthcoming.

However, when the old classmate filled the reader in on the work he'd been doing, the meeting took a dark turn. The reader wondered how far he should go in expressing his concern about the nature of the classmate's work.

The classmate was involved with a company that sold used cars to people who had a hard time getting financing. While the classmate presented this as a wonderful opportunity to help those in need, it became increasingly clear that the firm might actually be preying on those with poor credit.

The reader asked his classmate what kind of interest rates his outfit charged for the used car loans. "Twenty-one percent," his friend responded. Granted, the borrowers most likely could not get readily available financing otherwise, but given that a typical car loan ranges from 3 percent to 6 percent, the rate seemed excessive. It would be akin to putting a car purchase on a high-interest credit card.

While nothing seemed illegal about the company's operations, the reader wondered how strong an objection he should raise to the high interest rates. After all, he didn't have much contact with the classmate and suspected he was going to do what he was going to do.

The right thing was to do what the reader did. He asked about the interest rate, mentioned that he thought the operation seemed founded on making a hefty profit on the backs of those with bad credit, and that there was nothing about the operation that seemed like a "public service."

The reader had no obligation to express righteous indignation, or to storm away from his encounter. He expressed his opinion after the classmate told him about the operation. The classmate changed the subject, they moved on in their conversation, and the two parted amicably -- unlikely to cross paths again soon personally and certainly not professionally. 

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1 comment:

Anonymous said...

Jeff, I doubt many used cars are sold at 3 - 6 percent so that part is a little off.
However, I guess the question is does the customer need a high priced car or not??? A car with a loan has to be at least moderately priced.
I happen to sell used cars as a business owner and see people with no money all the time. I usually send them elsewhere because I do not need the aggrivation. Am I a jerk for not "helping them out?"
The friend needs to evaluate his employment and whether it fits his moral views. You did not say what his job is?? What about the banker who takes my money at 1.7% and loans it out at 3 to 8 percent? Is he or she moral???
I can go on with this story but the point is there.
The friends should disassociate and leave as old friends.
Alan Owseichik
Greenfield, Ma