“Credit card users will have 45 days notice of rate increases and changes in terms, and more time between receiving a bill its payment being due, starting Aug. 20, according to a Federal Reserve rule implementing the Credit Card Act. Credit card companies also must review each consumer account whose rates have been increased, to consider whether changes in the conditions leading to the increase call for a reduction in rates. Each of these accounts must be reviewed automatically at least once every six months, and credit risk calculations are not to take these reviews into account.”
Posts Tagged ‘Credit Cards’
Credit Card Rate Hikes Require Warning
July 25, 2009Mandatory credit card arbitration under attack
July 22, 2009“Two major arbitration firms are backing away from the business of resolving disputes between customers and their credit-card and cellphone companies, throwing into disarray a controversial system that prevents unhappy consumers from filing lawsuits…
Although arbitration long has been controversial, the current situation developed rapidly starting last week when the Minnesota attorney general’s office sued the National Arbitration Forum, based in St. Louis Park, Minn., over the way it handled disputes. Among other things, the lawsuit contended that NAF didn’t disclose that it has financial ties to the debt-collection industry, violating Minnesota laws against consumer fraud, deceptive trade practices and false advertising.”
Capital One credit card defaults increase
July 15, 2009“Capital One Financial Corp’s (COF.N) U.S. credit card defaults rose in June as unemployment increased and Americans struggled to pay their debts, but the figures were better than expected and the company’s shares rose 3.2 percent.
In a regulatory filing on Wednesday, Capital One said the annualized net charge-off rate for U.S. credit cards — debts the company believes it will never collect — rose to 9.73 percent in June from 9.41 percent in May.”
Credit card bill of rights passes House committee
April 23, 2009The Credit Cardholders’ Bill of Rights (H.R. 627), sponsored by Rep. Carolyn B. Maloney (D-NY), was passed by a vote of 48 to 19. The bill now moves to the House of Representatives for consideration.
Press release from The House Financial Services Committee:
“The House Financial Services Committee today approved legislation that would provide credit card customers crucial protections against unfair, deceptive, and anti-competitive credit card practices, which include double-cycle billing, due-date gimmicks, and retroactive interest rate hikes. The bill would also increase the advance notice of impending rate hikes and give consumers the information and rights they need to manage their credit responsibly.”
Courtesy of Consumer Law & Policy Blog
Credit card default way up in 4th Q 2008
March 20, 2009Defaults spiked in the fourth quarter reaching more than 6%. As posted in creditslip, the credit card companies have no one to blame for themselves. They looked to bankruptcy reform to keep defaults low and that didn’t work out. They extended credit to people who shouldn’t have gotten it after mortgage lender started to tighten credit back in 2006 and they have created all kinds of sneaky charges that give people reason to feel these companies are deceptive and not deserving of their hard-earned dollars.
More credit card customer lawsuits
February 28, 2009This one is filed against HSBC USA in Illinois state court and the plaintiffs are claiming that the bank charged them an annual $50 fee which according to the terms of the agreement they could avoid paying by cancelling their account within thirty days. So they cancelled their account within the specified time period but, according to the suit, the bank refuses to acknowledge this and return the fifty dollars to the plaintiffs.
Chase sued: changed terms on fixed rate loans
February 7, 2009According to the plaintiff who filed a class action complaint in Hawaii federal court, Chase Bank offered him a fixed rate on his loan which he accepted. The plaintiff claims that the language of the offer gives the “impression” that there will be no other fees associated with the loan for its duration. However, in January 2009, the bank started charging the plaintiff a $10 service fee that he says violates the terms of the agreement.
My take on this is that the law doesn’t care about “impressions.” If the offer didn’t expressly say that service fees couldn’t be charged on the loan, then legally they could be. Not nice but very typical of the industry.
More pet-store crime: stealing sharks
January 21, 2009
Elbert Starks walked into a New York state pet store, plunged his hands into a fish tank and came up with a shark that he managed to take home and place in a 350 gallon tank. But Mr. Starks wasn’t done yet. Next, he walked into a Pet Barn, saw a credit card lying on the counter that turned out to belong to a store employee and he used it to purchase a $300 eel at “Parrots of the World” (buying an eel at a bird shop?)
The store owners reported the theft and the police put Mr. Stark together with the shark and eel and arrested him at his work.
New credit card statements
December 30, 2008
Congress finally passed new credit card disclosure laws. One of the requirements is that credit cards companies must provide critical information about a customers monthly statement in an easy-to- read fashion. Below is a link to what the new information will look like on your credit card statements. But don’t get too excited because the credit card companies have until July 1st, 2010 before they have to provide this to you:
Link to new monthly statement disclosures
Nordstrom’s warning: upscale card defaulters
December 12, 200810-Q Detective spotted this warning in Nordstrom’s third quarter 10-Q reporting. The rates of default on Nordstrom’s credit cards, geared to the higher-end shopper, has risen dramatically with write-offs on credit debt rising in the last 9 months from 3.4% to 5.7%.
Earlier, I posted about the likelihood that credit card companies might be the next industry with its hat out for some Fed $$$ love. If Nordstrom’s is having trouble with writing off card debt, what’s going on at the lower-end?
Reading Tea Leaves by Randy Wilson 