- The CFPB issued a report detailing the issues faced by consumers regarding credit card rewards programs and reminding credit card industry stakeholders that federal consumer protection laws—including the Consumer Financial Protection Act’s prohibition against unfair, deceptive, or abusive acts or practices—apply to rewards programs offered in connection with consumer financial products or services.
- The Credit Card Rewards report describes consumer complaints received by the CFPB regarding credit card rewards programs, including “bait-and-switch” offers and other unexpected conditions, such as vague or hidden sign-up bonus limitations, terms that reserve the right of the credit issuers to revoke an offer if account behavior suggests churning (patterns of gaming or abuse), and rewards inflation whereby issuers and merchant partners reduce the value of rewards by increasing the points required for redemptions. Consumers also reported issues with customer service “doom loops,” loss of rewards due to expiration or account closures, and difficulties in challenging revocation decisions.
- The CFBP states that it will continue monitoring credit card rewards programs and work with governmental partners to take necessary action on these issues where appropriate, and it is warning credit card issuers to ensure that their administration of credit card rewards programs complies with the law.