| WASHINGTON, Sept 3
WASHINGTON, Sept 3 The top U.S. consumer
protection regulator issued a stern warning to credit card
companies on Wednesday, saying it believes some of them are
deceiving customers about hidden fees associated with certain
The Consumer Financial Protection Bureau's director, Richard
Cordray, stopped short of saying whether his agency may pursue
any enforcement actions against credit card companies.
But he said that hitting customers with surprise fees is
illegal and urged companies to make sure they clearly disclose
how these promotional offers work.
"We are putting credit card companies on notice," he said in
a press release.
The marketing materials at the heart of the CFPB's warning
center around interest-rate offers, such as balance transfers or
deferred interest deals.
Typically, a consumer is charged a fee to transfer a balance
or required to make a purchase in order to get a lower interest
rate. But consumers may not always be told after they transfer
their balances to the new card that additional purchases may
incur interest right away.
"The Bureau believes some companies' marketing materials do
not clearly disclose that consumers must pay off the promotional
balance by their due date to avoid racking up unexpected
interest charges on routine purchases for which they were not
charged interest previously," the CFPB said in the press
"For some consumers, these surprise charges can make the
cost of transferring a balance more expensive than revolving the
same balance on their existing card."
The bureau did not name any credit card company.
The CFPB was created by the 2010 Dodd-Frank Wall Street
reform law following the global financial crisis. Its mission is
to protect consumers from abuses or deceptive practices
surrounding certain financial products such as credit cards and
A copy of its new bulletin warning credit card companies is
available here: here
The CFPB on Wednesday also released a list of tips for
consumers to help them understand how grace periods work and how
to evaluate credit card promotional offers.
(Editing by Jonathan Oatis)