Bank and Credit Card Practices – What You Need to Know

Banks and credit card companies employ a lot of underhanded practices that make it seem like the public is benefiting but in actuality, these tricks do more harm than good. If you have encountered a situation wherein you’ve been misled or deceived, banks and credit card companies may be held liable as there are laws that regulate such practices.

Criteria for Deceptive Acts

The Federal Deposit Insurance Corporation (FDIC) has outlined certain measures to curb misleading practices. Banks and credit card companies are mandated by law to sufficiently explain the characteristics of a given promotional offer. The information found on advertising literature must be complete. For example, a credit card reward program should not only harp on how much cash a consumer is paid back, but should also detail the provisions and circumstances under which this reward is applicable.

Some credit card companies highlight the cash back offer but fail to disclose details such as up to how much a consumer must spend before the reward is granted, the duration of the promotion, whether this reward is given as a lump sum and so on. Omission of such important details is a clear indication of deception.

Information on advertisements must not be ambiguous so that the consumer understands what a particular service or product entails. Additionally, any follow up communications with the customer must be able to further clarify the terms and conditions of services or promotions to ensure the customer really understands the intended message.

A Word on Overdrafts

The FDIC along with other regulatory agencies has come up with guidelines as to how services such as courtesy overdrafts should be marketed and communicated to customers. These rules are quite simple but clearly, a lot of banks don’t follow these rules.

First, all fees associated with the overdraft program must be divulged. This includes transaction fees, interest rates, penalty fees and so on. Banks should also disclose in what instances these fees will be imposed. Will the customer be charged per transaction, is there a daily charge and so on.

There are even rules on proper notification regarding overdraft protection usage. I f possible, the bank should inform customers if a particular transaction will bring about any overdraft fees and they should be given an opportunity to opt out of the transaction. The bank should also provide notification to the customer once he has accessed the overdraft program. Details such as overdraft amount, fees incurred from the transaction, how much the customer needs to repay the draft should be outlined in the notice.

What to Do

If you believe you have been subjected to misleading practices you can issue a complaint to the bank. You should first try to resolve the matter directly with them before attempting any other measures.

Should this fail, you can ask for assistance from the consumer helpline of the Federal Reserve. You can file a complaint online, through fax or through snail mail. Your complaint letter should contain your name and account details, the name of the bank and the representatives that you’ve dealt with as well as a detailed explanation of your problem.