Mexico watchdog raps banks for credit card practice
MEXICO CITY, Jan 23 (Reuters) - Mexico's financial consumer watchdog warned on Wednesday that three of the country's biggest banks, eager to expand their lending, are activating credit cards on behalf of clients who have not asked for them.
The watchdog, called Condusef, plans to complain to regulators about the foreign-owned banks involved in the practice, which is against regulations, senior official Jose Maria Aramburu told Reuters.
Mexico's largest banks include Citigroup (C.N), BBVA (BBVA.MC), Santander (SAN.MC), and HSBC (HSBA.L).
Aramburu refused to say which banks Condusef is eyeing but said complaints from angry consumers with unsolicited credit cards were growing.
"Clients frequently become registered in the credit bureau with debt from credit cards they've never had it their hands," Condusef said in a statement.
"They've never received an account statement, but when they revise their status in the credit bureau, it says they owe $20 or $40 for commissions on credit cards they never asked for," Condusef said.
Spokesman at BBVA, Santander, HSBC and Citigroup could not be reached.
Bank lending in Mexico dried up in the 1990s after a financial crisis ruined the financial industry.
In recent years, Mexico's big banks, now owned by foreign players, have jumped back into lending.
Car loans and mortgages are now easily accessible for the first time and banks have begun to mail out unsolicited credit cards.
Bank consumer credit is expected to have grown about 20 percent in 2007. More credit expansion this year is seen driving consumer spending and helping the economy weather a possible recession in the United States.
Non-performing credit crept up to 2.5 percent of Mexican banks' portfolios at the end of the third quarter from 2.16 percent six months earlier.
Foreign banks are frequent targets of politicians in Mexico, who accuse them of charging higher fees and commissions locally than in their home countries. (Reporting by Noel Randewich; Editing by Gary Hill)
