Avoid “Deceptive” Card Practices
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Just in time for the holidays, credit card customers are receiving a gift – of sorts – from the credit card industry.
Some Discover, American Express and Capital One customers will receive refunds to their accounts as the result of a settlement brokered by the Consumer Financial Protection Bureau. The issuers will have to pay out $435 million in refunds to nearly 6 million customers by March for what have been deemed “deceptive practices,” including: charging increased fees, withholding rewards and charging for bogus protection plans. Eligible customers will receive their refunds in the form of credits to their accounts and former customers will get checks in the mail.
It’s a scenario that, unfortunately, could happen again in the future, so here’s how to curb these “deceptive practices” and protect your money.
Watch Out For Third-Party Marketers
The current situation credit card issuers find themselves in began with marketing firms deceptively promoting the benefits and services of the card companies that hired them. After signing up, customers soon found they hadn’t received the benefits, leading to losses and billing headaches. Avoid the whole mess by only discussing promotions, billing and account changes with your issuer. If you receive promotions by direct mail, email, even via social media (which is increasingly popular,) follow up with a call to your company instead of signing up directly.
Monitor Fees
One of the biggest card complaints is the fees. Card companies charge various fees at different rates, so it’s no surprise that many of the customers they’re now refunding didn’t skip a beat when bogus nominal fees appeared on their accounts. One way of combatting this is to keep a close watch of fees you’re charged by setting alerts with budgeting software like Mint or Manilla. Also consider signing up with BillGuard.com, a free security service that alerts you to hidden charges, billing errors, misleading subscriptions, scams and fraud on your credit card. With alerts, you’ll receive email or text messages whenever you’re charged. And while most fees are legitimate, you should look out for others – including activity and payment protection fees, according to CreditCards.com. Investigate with your issuer if they show up on your account.
Report Discrepancies
Finally, in the case of some discrepancies on your account, you’ll have to file a complaint. It may seem tedious but remember that complaints led to this settlement. The CFPB suggests first contacting your credit card company but it that goes nowhere, file a complaint with the agency. They maintain and track consumer complaints to insure action is taken and the problem resolved.
Photo Courtesy, 401(K) 2012.
