A Roundup of Credit Card Ripoffs

Major banks and credit card companies have been caught red-handed misleading their customers with deceptive credit and debit card fees. The Consumer Financial Protection Bureau, agency established last year to protect consumers from unfair and abusive practices of financial institutions, ordered Bank of America, American Express, Capital One and Discover to refund $425 million to their customers.

Sacramento Bee personal finance columnist Claudia Buck lists a few of credit card fee scams used to rip-off consumers:

• “Bank of America routinely processed debit transactions in order of highest to lowest amounts. Instead of debiting them chronologically in the order they occurred, the bank started with the highest amount - say a $1,000 rent payment. If that exceeded what was in the person's bank account, then every subsequent debit charge racked up overdraft fees, which typically are $35 per transaction. As a result, some consumers got dinged thousands in overdraft fees.”       

•  “American Express: Three AmEx subsidiaries were ordered to pay $85 million to about 250,000 cardholders for various illegal credit card practices between 2003 and spring 2012. The violations "occurred at every stage of the consumer experience, from shopping for cards, to applying for cards, to paying charges, and to paying off debt, " said the CFPB." 

•  “Capital One's call centers targeted consumers with low credit scores. When those customers called to activate their credit cards, "high-pressure" salespeople were misleading about the cost, eligibility and benefits of various products, such as job-loss "payment protection" or credit score monitoring.” 

 You can read Claudia Buck’s article here.