January 22,2009
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It's Just Not Fair!, Pt.4
– Harmful omission is a sin and is illegal.3) The misleading credit card representation or omission must result in tangible (material) damage: Sorry, there is no relief for all the duress and stress, much less all the time and effort that goes into it. However, more than just money is considered. Lead-in behavior is accounted for here. If you are promised something at face value and act on this promise, only to find that an important omission had deliberately obscured your judgment (if you had only known, you would have said "No") is involved, you may have a strong case. A recent case tried by the FTC slammed credit card CompuCredit with very heavy fines (repaying $114 Million worth of fees onto the issued credit cards) and a $2.4 million penalty.
Among other things, CompuCredit had issued a large number of credit cards with a specified spending limit. When the credit card clients got their new cards they found the limits were reduced to half. It was later explained to these victims were told they had to wait 90 days for the full amount while their spending habits were evaluated. Some were told that, if their habits weren't up to CompuCredit's secret standard, their limits would never reach the amount specified when they opened their accounts.
Obviously, the FTC was not impressed. So, you can see that damage can be considered ‘material' if it strongly influences a credit card consumer's decisions. (For more information on the ills of CompuCredit, please refer to the news reports entitled: "CompuCredit Corp. Con.", "CompuCredit's "Behavioral Scoring Model" and "Surviving the CC Earthquake, Pt.4".)
So, be consoled that steps are being taken as this is written that will provide strong relief to protect credit card consumers from the worst abuses. With the help of President Obama, Congress is about to enact "The Credit Card Holders' Bill of Rights". Look for this to happen within the next few months.