Monday, November 9, 2009

Banks Launch Last Ditch Free-for-all

Before New Rules Kick In Next Year, Banks Take Last Opportunity to Gouge Customers with "Deceptive" Credit-Card Fees and Interest Rates

The nation's largest bank credit-card issuers are taking their last opportunity to gouge customers with inflated fees and interest rates before what the Federal Reserve has called "unfair and deceptive" tactics are officially outlawed in February 2010, according to a new report. The issuers, representing about 400 credit cards in the U.S., are reportedly hiking interest rates, penalties and fees "in full force" ahead of the new regulations.

The new report is from the Pew Health Group's Safe Credit Cards Project. "Until the law takes effect we're seeing that all the major credit-card issuers on the bank side are continuing to engage in these unfair and deceptive practices," said Nick Bourke, project manager of the Safe Credit Card Project, MarketWatch reports. "The numbers of unfair and deceptive practices have grown and in some cases are worse."

There's no question that the economic malaise and the millions of people without jobs has had a damaging effect on credit companies too. Credit-card charge-offs and delinquencies this year have doubled, even tripled in some cases, and are still hovering in record territory at the nation's largest banks with the outlook only worsening, reports MarketWatch writer Jennifer Waters. "Some of (those interest-rate and fee hikes) occurred because of the economic environment we're in," Bourke admitted. "But the timing is pegged at getting a lot of changes in before the bill takes effect."

Here's the article:

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