Dennis Alter and the Tragedy of Advanta

Construction of his new house? $80 million. Donation to Temple University? $15 million. Cranking up interest rates on his customers’ credit cards to nearly 40 percent? Shameless.
Text Size: A | A | A
By Matthew Teague

Like the flicking of a great light switch, Advanta shut down its credit cards with just a few days’ notice. Alter and his executives whittled the company down from a peak of 3,000 employees to a couple of hundred, tasked to collect bills. The company will likely hunker down and gather payments as long as possible, then use the cash to pay off what debt it can, and then — well, no one can say. “They could pull a rabbit out of their hat,” Robertson said. Then he recalled Alter’s ability to save Advanta from previous deaths, reanimating his banking company as a mortgage lender and then a business-card issuer. “Or they can morph into an entirely new business. Which is something these guys have a history of doing.”

In the meantime, the shutdown e-mail gave no hint of what customers using the card — say, while traveling at that moment — should do, assuming they received the e-mail at all. “To be notified of this only a few days in advance,” Feltner wondered aloud on his online journal. “And to be notified by e-mail. Advanta sucks!”

TWO OF THE gentler criticisms of Advanta, recently, came from customers in Florida and Pennsylvania. They contained no curses or threats, but would perhaps have stung Dennis Alter worse than all the others: “God help the poor folks who have large balances they are unable to pay off immediately,” one person wrote to a consumer-complaint website, after Advanta’s rate hike. “This company can create a true hardship for small businesses.”

Alter has always pushed the image of Advanta as a family business. Even as its annual revenues climbed into seven digits, then eight, then nine, and Alter erected his gilded palace on the city’s edge, he would hark back to his father in that spare bedroom in North Philadelphia: licking stamps, mailing articles to the teachers he knew so well. “I can still picture that little room with my dad sitting in it alone at his desk,” he told Smart Business in 2006. “I can picture the small-business person toiling away, trying to make a living doing what they do.”

But as Advanta grew, the son had drifted from his father’s philosophy. Deep understanding of people’s needs evolved into an algorithm designed to predict which sliver of the population could produce the most profit. Empathy gave way to electronic greed.

Like graffiti written with a ghostly hand, a post titled “For Your Father” appeared on another consumer-complaint site this summer: “Dennis Alter, you have abused your Advanta Management position by taking financial advantage of your customers at a time they can least afford it. A 37 percent interest rate is beyond excessive & moral reason. And I am sure you know in your heart, your father Jack would not approve of such abuse,” the customer wrote. “It does not matter how many funds you donate, Mr. Alter, or how many wonderful ‘titles’ are bestowed upon you. … Your company policies have hurt and betrayed hundreds of thousands. I know I have to find a way to forgive you, for the suffering you have caused my family, Mr. Alter. But I do not have to respect you.”

And so the rise and fall of Advanta embodies a final, terrible symmetry: The apotheosis of family business, in the end, destroyed untold numbers of families and their businesses.

 

 
 
Originally published in Philadelphia Magazine, October 2009

  • Pingback: Will Crowdfunding Work for Startups and Investors? It Depends

  • Pingback: Ex-Advanta CEO’s Estate on the Block for $30M | Milwaukee Bankruptcy Attorney | Lawyer Bankruptcy Filing

  • Pingback: Ex-Advanta CEO’s Estate on the Block for $30M | Milwaukee Bankruptcy Attorney | Lawyer Bankruptcy Filing

  • Pingback: Ex-Advanta CEO’s Estate on the Block for $30M | Milwaukee Bankruptcy Attorney | Lawyer Bankruptcy Filing

  • Pingback: Ex-Advanta CEO’s Estate on the Block for $30M | Milwaukee Bankruptcy Attorney | Lawyer Bankruptcy Filing

  • Pingback: Ex-Advanta CEO’s Estate on the Block for $30M | Chapter 11 Bankruptcy Los Angeles California

  • mikemark8

    2012, it’d be nice to see an update on what this robber baron is up to currently-I have no doubt he still thinks he has helped people, but his greed and deceit should always be remembered. Whenever I am near his Ambler ‘palace’ or the mocking ‘tribute’ he used stolen money to fund at Temple, I am reminded of how his greed hurt thousands of families and small businesses. Hell is too good for Alter.

  • T.

    Has he been indicted yet, or already in prison?

  • Anna

    Hooray, Advanta has closed and can no longer screw anyone else. Advanta card was an important part of our growth in our early days and then all _ _ _ _ broke loose. Thank God they can no longer screw

  • George

    Seems to be a consensus that the CEO Dennis Altruister ran this company into bankruptcy. How did he yield so much power? Seems ridiculous that the Board or other mucky mucks couldn’t rein in the ba

  • william

    Totally accurate. Alter had much smarter people than him running consumer cards and mortgage. He sold both at the right time and made a ton of money and so did a number of people that worked for him. His ego, huge but very fragile and his inability to trust anyone is at the root of Advanta’s ultimate demise. As he ages, his behavior is more bizarre, his decisions are that of an old man with many regrets and anger towards the people that rightfully benefited from Advanta in it’s heyday. He is full of resentment towards former executives, his wife and his anger clouded his ability(weak as it always was) to manage the business effectively and entrust the right people to carry on. The flavors of the month were trusted with huge decisions and raised interest rates on the best customers. They left with their share while their decisions took the company down.

  • Paul

    As a 13 year veteran of Advanta, I would like to clarify a couple of things. One, the small business card was started by Advanta in 1994 but was not on Dennis’ radar until he had killed the consumer card and mortgage operations with sub-prime, high interest lending (exactly the opposite of what Jack Alter envisioned). When the mortgage operation started floundering the execs realized the business card was keeping Advanta afloat, and almost immediate sold mortgages to Chase and started running the business card into the subprime boneyard.
    There are also those defending Advanta as being another “victim” of the economy. I don’t have room here to counter that, but history will show that Alter’s policies were prime contributors to Advanta’s failure as well as part of the overall economic meltdown.

  • Researcher

    GO HERE Right now: https://www2.fdic.gov/starsmail/index.asp

    Just 200 more justifiable complaints will make a
    difference.

  • Robert

    As a small business owner, I too was seduced by Advanta’s attractive “Small Business” credit card introductory offer a few years ago. I financed close to $10,000 worth of equipment for my business on the account, then a year ago Advanta increased my APR from 9% to 36% (and I’ve never been a day late on paying). Today, I just attained a personal loan from USAA (the most ethical financial institution I’ve ever done business with) for 12%, which will save me $4400. on the remaining $8500 balance on my account, as opposed to enriching the already wealthy Mr. Alter and his associates.

    Deceitful, predatorial bastards like Mr. Alter and his associates are a poor excuse for human beings, and if I ever had the opportunity to meet him/them in a room it would not be pretty.

  • Paul

    I also worked at Advanta. It was the worst professional experience of my 25 year career. He in not only a terrible business person he is also a horrible human being. Most of his direct reports saw this coming and left before the meltdown. He’s mean spirited, has a huge but very fragile ego and barley average intelligence. He would never make it as a CEO outside of Advanta. He took his father’s business a drove it into the ground. Of course he’ll walk away with a ton of cash but Advanta is finished. Let’s not forget Bill “The Creature” Rosoff. He is just as much to blame for Advanta’s demise as Alter. He simply keeps a lower profile.

  • Michael

    What this man did to me is terrible. We all have the same story. Instant hi rate. He should be hung in the public square. YOU FUCKEN BASTARD

  • Joe

    he’s a terrible man. for all the good he does, it’s always in his name. comes with conditions, ultimatums or watch out when you get on his bad side. he is ruthless, nasty, insensitive, cold, vindictive. a lousy businessman that makes his business decisions based on his personal agenda, emotions and fondness of the idea or the person or people involved. the sandbox is only big enough for him and his brilliant ideas.

  • Peter

    If there is a new-age businessman that fills the mold of the J. Foster Kane in the classic movie “Citizen Kane,” it is Dennis. A man coming from very humble beginnings who reaches the pinnacle of success, wants the general populace to love him (in Alter’s case, through charitable giving –but only if his name can be attached to the project in bold, golden print) but whose flaws ultimately come home to roost and spell the ruin of his enterprise. A tragedy, and repeat of history.

  • Anonymous

    Dennis was always King of Bad Decisions.

    I feel sorry for his lovely wife and step-children. They will all survive this fiasco, I am sure. Where there is money, there will be lots of Trust Funds, prenups etc.

    Dennis and his supporters took down many families and small businesses. He didn’t make the false statements and iffy decisions on his own.

    Maybe he will live long enough to see another scheme come to life and suck all the life out of that, too.

  • cece

    his son is in my grade at my school and its obvious how incredibly rich they are

  • Scott

    I will never understand Alter’s business model. Lure honest small business owners with 7% interest, then nail them to the wall with 30% rates, quadruple their payments and force them to either pay it off or trash their credit. How many small businesses have been struggling then put under by this man and his practices? So far today alone I learned of two class actions against Advanta. 1 from employees and another from Investors. Just wait until the customers get rallied up! Mr. Alter-you Sir are an American Villan.

  • Philip

    Icontracted for a 2.99% rate, without notice or opt out opportunity–went to 32.99%.Allways paid on time well above minimum required. Dennis Alter is a thief of the third magnitude–a total scum.

  • mike

    to the former employee-I had my rate go from 7.99 to 25.99, had a credit score of 780, and was never late with a payment and always paid the minimum-I also was not sent an ‘opt out’ notice. Greed is greed, and Alter is the worst. This clown builds a palace for himself, pays millions to have Sir Elton sing to him, and you defend him as a ‘businessman’-well, your hero hurt thousands of true ‘businessmen’.

  • diane

    I was an emoployee of Advanta for 3 years and I am wanting to defend the bad reputation they are getting in this article.I have never worked for a company before that cared so much about the employee.I do not blame being unemployed on Dennis Alter.He is a business man and needed to make business decisions that he felt were right weather we agree or disagree.None of us had billions of dollars on the line that possibly would not be repaid.It is not a fact that all Advanta customers rates were raised to 40%.It is not mentioned in the article that Advanta sent out letters letting customers know rate would change.These customers also had the chance to say they did not agree with the new rate.Oh and if the customers neglected to read the mail which most did then you also had the opportunity to call when you got the bill and saw the new higher rate to opt out(in credit card terms this means the account would be closed but the customer would have the opportunity to pay the bill off at the old

  • vicki

    I worked for Advanta for almost 10 years. We were told in January when an article came out about the default rate that it was incorrect and we had nothing to worry about. Two weeks later I was notified that my job was being out soured to India via e-mail. I understand how these cardholders feel. Believe me as a former employee we disliked telling people hey your rate is going to nearly 40%. I was always a cheerleader for Advanta for the most part we as employees cared and tried to do everything we could to help our cardholders. Most of us went to great lengths to try and “do the right thing” for them. I feel for everyone, cardholders and my former co-workers. We were all screwed by bad business choices. But hey on the lighter side at least Elton got paid from Dennis. I’m sure its hard being rich and may get depressing making choices to ruin other peoples lives. You need a legend to come and make you feel better. I wonder if he had him give him warm milk and cookies afterwa

  • Bwca

    Instead of charitable donation are the wealthiest Americans to
    bail out the less fortunate? It seems to me that it would be most
    constructive for everyone to deal with own fall from the bubble and
    not point fingers in arbitrary directions.

  • Bwca

    This feature article was birthed to aimlessly compromise the
    reputation of a preeminent man of vast benevolence. Dennis Alter is
    not the man responsible for the delinquency of an entire industry. The
    entire world is embroiled in the same meltdown. When a company or bank
    enters upon a credit agreement with a client, there is legal room and
    a great reality that debt could go sour. Logistically, is it the
    lender or the most irresponsible recipient that is to suffer? (In a
    perfect utopia nothing bad would happen and everyone who chose to
    spend 10,000 dollars on their credit card companys tab would be
    forgiven) Lessons of a great diversity are being learned by
    millionaires and small businesses alike. If someone called you and
    said that you could spend 5,000 dollars that you didnt have just
    because, would you? By a general rule, irresponsible decisions dont
    equate absolution. Regardless of fiscal worth, everyone rode the same
    bubble. Instead of charitable donation are the we

  • Kathy

    I hope the small business owners refuse to pay your outrageous rates and put you out of business. I hope you sink fast! How would you like to pay 34.99% interest?