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Credit Card Applications » News » Other » Credit Card Companies Ordered By the US Senate to Disclose Fraud Policies

Credit Card Companies Ordered By the US Senate to Disclose Fraud Policies

March 15, 2010
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The US Senate led by, Senator John Rockefeller, of West Virginia has demanded the nation's top credit card issuers, namely American Express, Visa and MasterCard to provide legislators their policies regarding credit card security, in light of the recent Web scams where the credit card companies were also implicated.

Public anger has been mounting on illegal techniques employed by deceptive companies to charge fees for services that are not delivered. Three finance companies namely Affinion, Vertrue and Webloyalty have been identified by investigators as the most active participants in this new online scam.

Initially, customers would be offered an irresistible deal by shady finance companies wherein they are assured of reward points and cash-backs in return of making purchases online. Consumers who fall victim then register their credit card information to the companies' Website, not fully aware that they have been led into a trap. When they get their next billing statement, they would discover that they have been charged with ridiculous fees that they have not benefitted from.

These companies who act like criminal syndicates access customers' credit card information and later on bill them with "imagined" fees. Not a few consumers have taken notice of this clever ploy and many have demanded a refund from companies involved. Others have even threatened to take legal action and to file cases in court.

Millions of Americans have already been defrauded by this illegitimate money making scheme. Upon investigation, the Senate discovered that finance companies have been raking in billions of dollars in profit from the scam. Legitimate web sites are also on the payroll of these corporations, with one popular Website, classmates.com reportedly earning $70 million for displaying ads on their site.

Credit card companies have been slow to respond and are reluctant to implement policy changes since they are also on the take in these illegal activities. They earn money from finance companies by assessing transaction fees from refunds. The revenues from this activity can easily translate into millions of dollars. This seeming indifference has incensed legislators who are quick to accuse credit card companies of being callous.

Credit card firm officials are now being ordered by the Senate to provide them a list of guidelines that they have in place regarding resolving complaints from customers and sharing credit card information to companies without prior consent. They are also made to disclose the fees they charge Affinion, Vertrue and Webloyalty for refunds from irate customers.

Critics say that credit card companies do have strict guidelines regarding charging clients of services they have no prior knowledge of, but are too sluggish to enforce them since this would mean millions of dollars in lost revenues.

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