September 03, 2014

CFPB warns about deceptive credit card offers

Sept. 4, 2014 – CFPB put out a bulletin Wednesday warning credit card companies against deceptive marketing campaigns offering 0 percent or lower rates on credit cards only to include surprise interest charges later.
Bureau Director Richard Cordray said, "Credit card offers that lure in consumers and then hit them with surprise charges are against the law. Before they sign up, consumers need to understand the true cost of these promotions. Today, we are putting credit card companies on notice that we expect them to clearly disclose how these promotional offers apply to consumers so that they can make informed choices about their credit card use."
In particular, CFPB noted card issuer marketing campaigns that do not clearly explain that consumers must pay off the promotional balance by the due date to avoid the surprise interest charges. Credit card disclosures are regulated by the Credit Card Accountability Responsibility and Disclosure (CARD) Act, implemented by Regulation Z.
The bureau also published tips for consumers about credit card interest-rate promotions and how grace periods work, which are available on its website.