Dec. 18 (UPI) — The Consumer Financial Protection Bureau warned law enforcement on Wednesday that some credit card companies may be illegally devaluing the value of reward points and air miles.
The CFPB said in a statement that major credit card issuers frequently engage in “shell games that increase their own profits and lure people into higher-priced cards while denying consumers the benefits they receive.”
The agency announced major measures Wednesday to protect consumers from illegal credit card activity and save them money on interest and fees.
“When credit card issuers promise cash back bonuses or free round-trip flights, they should actually deliver them.The CFPB is targeting bait-and-switch tactics to protect consumers and give people more services. “This is a choice that is promoting competition in the credit card market to provide more competitive services,” CFPB Director Rohit Chopra said in a statement.
In a notice to law enforcement agencies, the CFPB warned of specific violations of federal law. The Consumer Financial Protection Notice is issued to all parties authorized to enforce federal consumer financial laws.
These include devaluing earned rewards, hiding the terms of earning or retaining rewards, and not delivering promised benefits.
The CFPB’s circular states that “a rewards program operator may commit an unfair or deceptive act or practice if it substantially reduces the overall value of benefits that a consumer has already earned or purchased.” There is.
The same applies if awards are canceled or revoked based on “hidden or ambiguous conditions,” according to the CFPB.
According to the CFPB, if a reward customer loses points because the redemption process doesn’t work properly, that may also be illegal.
The CFPB also launched a tool Wednesday called “Explore Credit Cards,” which is said to help people fully compare credit card options when choosing a card.
“Unlike existing comparison sites that have high annual fees and interest rates, rely on rebate schemes, and take money to promote cards, CFPB’s new tool provides unbiased and comprehensive data on more than 500 cards. . It is available to everyone,” the CFPB said in a statement.
