The top US consumer watchdog will closely monitor whether credit-card issuers follow through on their marketing promises of sign-up bonuses and other perks following Tuesday’s $250 million enforcement action against Bank of America Corp.
“We will be looking at whether there are similar practices at other credit-card issuers,” Rohit Chopra, head of the US Consumer Financial Protection Bureau, said in an interview Tuesday after regulators announced the settlement with BofA. “We are not going to tolerate any credit-card issuer that deceives consumers or engages in bait-and-switch tactics.”
Chopra said the CFPB received consumer complaints about card lenders failing to make good on sign-up bonuses and that it dedicates its investigative efforts to matters that attract complaints.
Bank of America, which didn’t admit or deny wrongdoing, agreed to pay $150 million in fines and $100 million to customers for improperly charging extra fees, withholding rewards and opening unauthorized accounts.
Read more: BofA to Pay $250 Million Over Extra Fees, Unauthorized Cards
In 2012, American Express Co. paid $112.5 million to settle CFPB allegations that included duping consumers into believing they would receive $300 as well as bonus points if they signed up for a specific offering.
“Bank of America operates a sprawling empire of consumer businesses, so certainly it’s critical that the CFPB continue to closely scrutinize its business practices,” Chopra said.
He acknowledged that banks are in a “fierce war” with one another to win over credit-card users, turning to bonus points and other inducements.
“When looking to sign up for a new card, many people closely scrutinize how many points they might get at sign up,” he said. “This is a very important piece of how consumers decide on which credit card they’re going to spend with.”
