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Consumers Union Urges Fed to Stop New Credit Card Tricks and Traps
November 20, 2009Consumers Union urged the Federal Reserve Board today to stop credit card companies from unfairly hiking interest rates and engaging in other unfair practices designed to get around new consumer protections set to go into effect in early 2010. The Fed is currently considering a set of proposed regulations to implement the Credit CARD Act passed by Congress earlier this year. Most of the new rules are due to go into effect on February 22. In the meantime, however, credit card companies are raising interest rates on many customers and implementing new changes to contracts in order to circumvent the protections of the new law. "There's no question that many credit card companies are using the long implementation time before new regulations go into effect to gouge consumers and test new ways to evade the law," said Lauren Bowne, staff attorney with Consumers Union. "The Fed should use its power to make sure consumers are protected from these unfair practices that undermine the safeguards Congress intended to enact." In a letter submitted to the Federal Reserve Board today, Consumers Union outlined a number of unfair credit card practices that have emerged since Congress passed the Credit CARD Act. Full release.