Regulators have taken aim at credit card companies over deceptive practices which see reward schemes used to lure consumers in before being changed.
The Consumer Financial Protection Bureau (CFPB) on Wednesday warned card suppliers against potentially law-breaking moves to devalue the likes of reward points or air miles.
“Large credit card issuers too often play a shell game to lure people into high-cost cards, boosting their own profits while denying consumers the rewards they’ve earned,” director Rohit Chopra said.
“When credit card issuers promise cashback bonuses or free round-trip airfares, they should actually deliver them.”
Consumers had reported that rewards promised when they applied for cards could be difficult to redeem or have even dropped in value, the regulator said.
Card suppliers were at risk of breaking federal laws as a result, it noted, with the regulator pointing to previous action against the likes of American Express and Bank of America in 2012 and 2023 respectively.
“The CFPB is taking aim at bait-and-switch tactics and promoting more competition in credit card markets to protect consumers and give people more choice,” Chopra added.