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Credit Card Applications » News » Other » Credit Card Complaints on the Rise

Credit Card Complaints on the Rise

August 05, 2009 | Updated on August 05, 2009
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The content is accurate at the time of publication and is subject to change.

With the economic recession not showing any signs of waning, Americans are gearing up for tougher times. Card companies are also preparing for the worse to come, slashing credit limits and implementing aggressive collection practices.

Because of increasing delinquencies, rising charge-offs, and delayed payments, credit card issuers are opting for better collection of payments. This has led to a spike in the number of complaints from American complaints.

The Consumer Federation of America recently released data about a survey conducted to find out how government agencies in different states dealt with consumer complaints. The federation represents some 300 pro-consumer groups across the U.S.

According to Susan Grant, the federation's director of consumer protection, the number of complaints has risen dramatically in 2008, along with the worsening economy. She also pointed out that while the number of complaints rose, resources of the concerned agencies fell.

The study surveyed 34 state, county, and city government agencies across the U.S. The various agencies deal with different complaints from American consumers.

Grant says that most of the agencies are suffering from severe budget restrictions, sometimes preventing them from assisting consumers. Sixty-two percent of the agencies included in the study reported an increase in the number of complaints. Most of the complaints are about credit payments and the like.

In all, a total of 265,324 complaints were filed, resulting in $247,499,155 worth of savings for American consumers.

The survey also found that one of the most prevalent complaints directly related to the economic slump are failed promises to repair bad credit scores. Some credit card complaints also included marketing practices and charges made through telemarketers.

While complaints about credit cards do not make up the bulk of the total number of reports, experts say that aggressive collection tactics can make cardholders report card companies to consumer protection agencies. They also contend that with a new credit card legislation looming, most banks and card issuers can turn even more aggressive when dealing with delinquent cardholders.

Grant also points out that even with complaints on the rise, agencies still have to see additional resources and budget allocations. She adds that the concerned agencies should be given proper public support to continue protecting consumers and their rights.

For their side, government and agency officials are asking for new laws and regulations to further improve consumer protection programs.

The research was conducted between March and May of this year and used data provided by various agencies.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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