Press Releases
CFPB Cracks Down on Credit Card Scams
WASHINGTON, DC — As part of its ongoing fight to lower costs for American families, the Consumer Financial Protection Bureau (CFPB) is cracking down on potentially illegal credit card reward scams, warning that some credit card companies may be taking advantage of customers by devaluing rewards while continuing to charge higher than average interest rates. The warning coincides with the release of the CFPB’s Explore Credit Cards, a new tool which empowers consumers to find the best credit card for their needs.
People should be aware of the bait-and-switch tactics employed by mega credit issuers that aim to lure customers into expensive card programs while withholding rewards. Lack of competition in the industry has given companies like Visa and Mastercard the leverage to burden customers and small businesses with sky-high swipe fees and interest rates. Between high fees and mis-advertised rewards, it’s a lose-lose for American families.”
Accountable.US Liz Zelnick.
Earlier this year, Accountable.US released a report revealing that credit card industry trade groups, Visa, and Mastercard, spent a combined $21 million in the first half of 2024 lobbying against increased competition in the industry. The groups have spent $80 million in total to hold onto their market dominance.
As it stands, the Visa-Mastercard duopoly allows the companies to impose exorbitant swipe fees—ten times higher than those in Europe—that have more than doubled over the last decade. Merchants are unable to negotiate these rates and are forced to accept the fees set by the two companies, which are then passed on to consumers.
The bipartisan Credit Card Competition Act (S. 1838, H.R. 3881) led by Senator Dick Durbin (D-IL) and Rep. Lance Gooden (R-TX) would require banks issuing credit cards to support multiple payment networks, fostering competition that would lower swipe fees, improve security, and provide additional benefits for people and small businesses alike.
