August 11, 2010
-
The New Replaces The Old, Pt.2
Potential violations.If you are currently a credit cardholder, you may have already begun to notice some of the creative steps that lenders have taken to generate income. According to the latest Pew Charitable Trusts report, during a 10 month period the average annual credit card fee increased to $59; an 18 percent jump. Credit unions, where credit cards typically cost less, also increased their annual fees to an average of $25; a 67 percent increase within the same 10 month period. Two other major fees, the cash advance and balance transfer fee had a dramatic increase as well going up to a 33 percent increase. Although these fees are not illegal at this time, financial institutions participating in these activities have pushed the Feds to the limit.
One way that some lenders have scooted around the new law is by offering a business card that has the same terms and conditions as a standard consumer credit card. Banks are able to offer this type of card without any concern to the terms of the new CARD Act because the new legislation does not cover business credit cards. A study conducted by Synovate indicates that business card applications that were mailed out to consumers during the first quarter of 2010 nearly tripled.
Complaints of deceptive activities by the credit card company range from charging late fees for paying on a Monday when the due date falls on a Sunday; promoting inviting rebate offers that can easily be revoked because rebates are covered by the law, and shortening the billing cycles. Such activities has sparked a number of groups including the National Consumer Law Center, the Consumer Federation of America and Consumer Action sent a letter of complaint to the Office of the Comptroller of the Currency listing several of these "potential violations" against the new legislation. The President's office has yet to respond.