The Consumer Financial Protection Bureau, which was established in July 2011 on the heels of the financial crisis, has long tried to get credit card companies to disclose more about the rates and fees they charge, and it turns out it isn’t doing such a good job at it.
According to the CFPB’s monthly complaint snapshot about credit cards, the government agency found consumers still have a tough time getting clear information from their credit card companies regarding their creditworthiness and information about the fees and payments they are on tap for.
“Credit cards are an important tool in the day-to-day financial lives of a large number of consumers,” said CFPB Director Richard Cordray. “It is important that credit card companies are being straightforward and clear about the costs and fees associated with their products so consumers have the information they need to make informed financial decisions.”
According to the monthly report, one of the top complaints for the month centered on trouble understanding why a credit card company made the decision it did regarding an initial application for a credit card. The consumers contend credit decisions are being made based on existing items on their credit report, which aren’t reflective of their creditworthiness. Another issue consumers had with credit card companies: confusion over how payments are applied to accounts that have multiple balances. The consumers who complained said they didn’t receive clear information about how the payments made were applied to the multiple accounts.
The CFPB also found consumers were charged with various fees and additional costs when using their credit cards, which they said were charged when things like automatic payment failed or a billing statement wasn’t delivered in a timely manner. Finally, the government agency said consumers felt misled about credit card reward programs, with many complaining they had a hard time receiving the benefits that were promised as part of a special rewards programs.