Home Consumer Consumer Watchdog Takes Aim At Credit-Card Rewards Programs

Consumer Watchdog Takes Aim At Credit-Card Rewards Programs

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By Shannon Najmabadi

Some credit-card companies may be breaking the law by illegally devaluing accrued points, airline miles and other rewards used to entice cardholders, the Consumer Financial Protection Bureau said Wednesday.

Card companies may be violating federal law if they deploy promotional language that conflicts with fine-print disclaimers; use buried and vague terms to revoke customers’ rewards; or otherwise prevent customers from redeeming rewards, the federal consumer watchdog said in guidance to law enforcement agencies.

At the end of 2022, three-quarters of general-purpose credit cards were reward cards, while the amount of earned rewards has increased substantially in recent years, it noted.

“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,” CFPB Director Rohit Chopra said in a statement.

Consumers said card issuers sometimes increased the number of points needed to redeem a reward or didn’t protect them when reward-program partners removed benefits or changed their terms, the agency noted at the time. Consumers complained of technical issues, such as customer service problems that made it difficult to redeem rewards, or rewards disappearing when an account closed.

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