Consumer Groups Decry Large Card Issuer Avoiding New Act
Four national consumer groups have urged the Federal Reserve to clamp down on practices, they charged, large issuers have put into place to avoid the most recent credit card reform act.
The accusation seemed to lay to rest concerns that one consequence of the new card reform law would be a blending of cards in the card marketplace and a resulting loss among credit union card issuers to the claim of being more consumer friendly.
Consumer Action, Consumer Federation of America, the National Consumer Law Center and the U.S. Public Interest Research Group wrote a Nov. 20 letter to the Fed complaining that large issuers were still putting into place retroactive rate increases, over limit fees, so-called 'variable rates' that only increase and never decrease and avoiding the consumer's ability to opt out of rate increases and close their account to pay it over time.
"The ink hadn't even dried on the President's signature on the CARD Act when we began seeing runarounds by the credit card companies," noted Lauren Saunders, managing attorney of the National Consumer Law Center's Washington office.
"Even if you read all the new changes in terms that are coming stuffed in credit card bills, chances are the disclosures will not reveal the tricks hidden inside" said Linda Sherry, director of National Priorities for Consumer Action.
"Incredibly, the Fed even proposes to allow banks to perpetuate unfair marketing to college students, even though Congress said to stop," said U.S. PIRG Consumer Program Director Ed Mierzwinski. "The Fed will allow banks to keep enticing students with free pizza at campus tables, so long as all the students who stop get free pizza, even if they don't sign up for a card."