The Consumer Financial Protection Bureau warned Wednesday that it may be against the law for credit card companies to devalue or cancel points, cash back and miles rewards programs.
The CFPB report also found that credit cards that offer store-specific perks often charge “significantly higher” interest rates than other cards, and that some companies offer promised perks when they don't deliver. He suggested that the company was trying to lure customers into high-interest cards without paying for it.
The report said some rewards programs may violate the law by “unlawfully devaluing the value of reward points or airline miles.”
CFPB Director Rohit Chopra said in a statement: “Major credit card issuers frequently play deceptive games to lure customers into high-priced cards, increasing their own profits while taking advantage of customer benefits.'' I refuse,” he said. “If a credit card issuer promises a cash-back bonus or free round-trip airfare, they should actually deliver it.”
The C.F.P.B. new tools It allows consumers to find the best credit card rates by comparing over 500 cards using “unbiased and comprehensive data.”
If companies reduce the value of rewards earned by consumers, they may violate federal law.
Consumers choose different credit cards based on the benefits they receive after they start using the card, but if a company later reduces the value of a customer's benefits, it's a scam that the CFPB calls a “bait and switch.” It may be unfair or deceptive. switch plan. ”
When companies hide the conditions for earning or maintaining benefits, such as by using disclaimers in the fine print or ambiguous terms embedded in contracts, they can unfairly conflict with the benefits that consumers are entitled to. The monitoring group said there is.
Companies may not be able to deliver the benefits promised through their compensation programs. The CFPB said that consumers losing points or not being able to redeem benefits due to system failures could also be considered unfair or deceptive practices.
The watchdog group has taken action against American Express and Bank of America for illegal practices in their rewards programs. The CFPB said it will continue to monitor the program and “take necessary action” as necessary.
