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Consumer Protection Board Fights Against Credit Card Abuse

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New York, NYAs part of its fight against credit card abuse, the New York State Consumer Protection Board has asked credit card users to send in their "horror stories" about unfair credit card industry practices.

According to the Consumer Protection Board, most consumers have at least seven credit cards. Unfortunately, the companies that issue the cards use many unfair tactics such as changing terms and interest rates without properly notifying customers and charging hidden fees that consumers do not always fully understand.

Credit card abuse victimAn introduction to the Consumer Protection Board survey notes that responses to the survey help shape policy. Questions on the survey include how many cards the participant has, how the participant learned about his credit cards, whether or not the participant compared the terms and conditions of his credit card, and what purposes the credit card is used for. The survey also asks whether the respondent understands the terms and conditions, knows what the annual interest rate is, and if the interest was ever raised because of a late payment on another loan.

In addition to its survey, the Consumer Protection Board is also encouraging consumers to take part in a letter-writing campaign to tell Congress and banking regulators how they feel about current credit card industry practices. A model letter provided on the website states, "As a New York State consumer, I believe that credit card companies have severely impeded my ability to make an informed decision about credit card options." The letter then calls on regulators to improve the readability of credit card agreements and put an end to universal defaults, unilateral changes in contract terms, over-limit fees, phone payment charges, and late fees when the due date is on a weekend or holiday.

In a statement on the Consumer Protection Board website, Consumer Protection Board Chairperson and Executive Director Mindy Bockstein said, "Juggling credit cards and excessive debt is typical for most American households. But trying to keep all that debt in the air is made more difficult by the anti-consumer practices that are far too typical in the credit-card industry."

One of the worst of those practices is the universal default clause, which some credit card companies use to increase the interest rate on their credit card if a consumer is late paying a different bill. Credit card companies say they do this because a late payment made to another creditor puts the consumer's payment to them at risk. The higher a risk a consumer is, the higher the interest rate will be. Some issuers, including Citigroup, are ending their use of universal default and legislatures are now considering passing legislation that would ban the practice.

However, it is not just a late payment that gets a credit card issuer's attention. Consumers who have high balances on other credit cards may notice their rates go up as well. One woman, as profiled on NBC News10, had her interest rate more than triple to 27.99 percent after her introductory period. The company did this because the customer's high balances on two other cards made her a risk to them.

Credit Card Rate Hikes Legal Help

If you have been a victim of any unfair practices by your credit card company, including substantial rate increases, unfair penalties or broken promises, and would like to take a stand by participating in an action against them, please contact a lawyer involved in a possible [Credit Card Abuse Lawsuit] who will review your case at no cost or obligation.
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READER COMMENTS

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In 2004 I defaulted on several Cards due to the effects of the Economy on my livelihood. Now Marine Midland Funding , who bought some of my accounts in a Bundle , obtained a judgment against me on 1 of my cards and keeps adding penalty raises going from an original debt of $3000 or so , to $5000.. I believe it was my mistake to try to negotiate with them by sending them a $20.00 check even if they were not the original creditor. I believed they were HSBC but instead turned out to be Marine Midland Funding acting through a Lawyer Cohen & Slomowitz , LLP. When I called the court to seek relief they said I should get a lawyer. I am in no financial position to retain a lawyer and having 2 properties precludes me from getting court help. This unsecured credit was obtained through an offer of ) interest for 1 year During President Bushes time when he encouraged the nation to run up credit without concern because we were the "Greatest Nation On Earth". So we would rebound. Today it is apparent that it is not true and we have a long way to go before we balance 16 trillion and counting. I contacted them several times in an effort to reach an agreement but their offers were not acceptable. I am thinking of writing the court and asking how to proceed pro se. This issue is depressing. HSBC hold a first and second mortgage on my home that I pay on monthly and still it is like thet stick the knife in me and then twist it. I asked for permanent modification on my second mortgage and it only if granted for six month periods as though something will change . Well I hope something changes. Thank you for your time.

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