Read Your Statment, Really
When you get your credit card bill each month, read the statement carefully.
You should:
- check the amounts of each listed transaction against your card receipts;
- spot any charges you did not make;
- study the fees; and
- note any unjustified fees.
If you haven’t already, set up a regular place—your briefcase,
a folder in the den, the sock drawer of your bureau…any place—where
you put your credit card receipts when you get back from traveling, shopping
or going out. Then, schedule a regular hour or two each month when you open
your credit card statements and connect each receipt to each posted item (and
read the small print at the bottom or on the back of each statement).
You’d be amazed how many times consumers’ credit cards are
charged for things they didn’t authorize.
In 2002, Citibank settled a lawsuit with 27 states and Puerto Rico because
of the deceptive telemarketing techniques employed by one of Citibank’s
marketing partners. Among the problems: Citibank customers were being billed
for products they hadn’t ordered. Providian Bank—another big card
issuer—has also faced the same charges. In 2000, the Comptroller of
the Currency noted:
…Providian engaged in a variety of unfair and deceptive practices
that enriched the bank while harming literally hundreds of thousands of
its customers. …we have entered into a consent order with the bank
that ensures not only that these practices will come to an end, but that
customers who were harmed will be compensated by Providian. The order provides
that the bank will pay at least $300 million in restitution to its customers.
...Consumers should not have to become detectives to find out the true terms
and conditions of their credit card agreement. They should not discover
after they receive their monthly statement that they have purchased a $156
credit protection policy that they neither want nor need. And if they are
promised a promotional bonus for transferring credit balances, they should
receive that bonus-and not be told after the fact that the program requires
a balance transfer of $10,000...
Credit card issuers have been known to tack on some tricky “extra”
fees, as well. In 2002, First USA Bank paid $39.9 million to settle a lawsuit
alleging it had charged bogus finance charges and late fees.
In addition to studying the finance charges and any late fees, keep a lookout
for an annual fee—especially if you selected a card that isn’t
supposed to charge one.
Fleet Bank got nailed in 2002 under the Truth in Lending Act for charging
an annual fee after its initial solicitation promised a card that was fee-free.
The appeals court wrote:
A statement…that a card has “no annual fee” made
by a creditor that intends to impose such a fee shortly thereafter, is misleading.
…Fleet’s proposed approach would permit the use of required
disclosures—intended to protect consumers from hidden costs—to
intentionally deceive customers as to the costs of credit.
Next: What to Do About
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