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The Tricks Major Credit Card Banks Use to Cheat You

Many people end up making the mistake thinking that major banks are their friends. Unfortunately, this is not the truth. Big banks have been the cause of many crises in America—like, for example, the mortgage crisis of 2008. The goal of banks is to earn as much money as possible, and sometimes that requires using some deceptive practices. Banks gain profit by lending you money. High interest rates mean that they’ll only profit as they lend you more and more money. To put it simply: banks benefit from people being in debt.

Luckily for most of us, the government created the Consumer Financial Protection Bureau to protect consumers from deceptive practices used by banks to gain profits. Since its creation, the CFPB has found many situations where banks and credit card companies manipulated and cheated their debtors. Keep reading to learn more about the tricks major credit card banks use to cheat you.

Breaking Down the Tricks Major Credit Card Banks Use to Cheat You

Chase & JPMorgan Chase Bank

Not too long ago, the CFPB caught Chase and JPMorgan Chase Bank using illegal credit card practices to manipulate and cheat their clients. Because of this, they were ordered to refund approximately $300 million to more the 2 million customers.

One of the tricks major credit card banks use to cheat you is adding on products and services without your knowledge. In the case of Chase and JPMorgan Chase Bank, they enrolled customers in credit monitoring and fraud reporting services without receiving any written authorization to do so. Their customers were charged anywhere from $7.99 to $11.99 per month for these services—which they never received—and were often charged additional fees due to exceeding their spending limits because of the charges or accruing interest on the unauthorized fees.

On top of all this, JPMorgan Chase was also recently ordered to refund approximately $50 million and stop collecting on 28,000 different accounts due to them selling credit card accounts with inaccurate debt information to collection agencies. They were also order to refund at least $50 million and stop collecting on accounts after they tried to file more than 528,000 lawsuits in situations where sworn documents were “robo-signed” and never fully verified for accuracy.

Discover Financial Services

Telemarketers for Discover Bank were caught manipulating and tricking customers into purchasing services they thought were free. These services included credit score tracking, identity theft prevention, wallet protection, and payment protection, and they typically cost customers $7.99 to $9.99 per month.

The telemarketers would speak unusually fast when explaining the terms of these services and sometimes even simply process the purchase without the customer’s clear consent. Because of this, they were ordered to refund more than $200 million to the affected customers.

American Express

Although American Express has typically been regarded as a solid and trustworthy company, they were actually ordered to pay almost $60 million after being caught using illegal credit card practices—including unfair billing and deceptive marketing techniques regarding their “add-on products”. They were also required to pay the CFPB almost $10 million in civil penalties.

Bank of America

Bank of America seems to be one of the most popular banks to trust, but they ended up paying some of the highest fees of them all. Recently, Bank of America agreed to pay more than $700 million in penalties after deceiving their customers into purchasing expensive and unnecessary services upon signing up for credit cards through the institution. The services in question included promises of debt cancellation or deferment that would supposedly protect the customer in the case of some unforeseen economic problem.

The deceit affected approximately 1.4 million customers, on top of another 1.9 million customers who were illegally charged for—and never received—credit monitoring and reporting services. Their further unfair billing practices also ended up causing more than $450 million in harm to their customers. The CFPB required them to pay $20 million in civil penalties.

Citibank

Citibank ended up paying more than $700 million to their consumers after using deceptive credit card practices. They were also ordered to pay $35 million to both the CFPB and to the Office of the Comptroller of the Currency. Their actions cause significant damages to around seven million of their customer accounts due to deceptive practices surrounding their debt protection and credit monitoring add-on products. They charged people without authorization and didn’t deliver services that customers did truly pay for.

Providian

The Controller of the Currency ordered Providian National Bank to pay more than $300 million to their customers after using unfair and deceptive trade practices. The estimated damages caused, however, may be much higher than the $300 million minimum payment required by Providian.

U.S. Bank

U.S. Bank was required by the CFPB to pay $48 million in refunds, $5 million in penalties, and $4 million to the U.S. Treasury Department for not delivering on products charged to more than 400,000 customers. These services would have included mortgage loan, credit card, and checking account add-ons to monitor customer accounts for identity theft or fraud. Unfortunately, no monitoring was ever done.

GE Capital

Now known as Synchrony bank, GE Capital was ordered to pay approximately $225 million after being caught using deceptive and discriminatory credit card practices. $56 million was paid to more than 600,000 customers affected by deceptive marketing practices, and $169 million was paid to more than 100,000 customers who were turned away due to their national origins—as they were residents of Puerto Rico and prefered to communicate in Spanish, they were not offered specific products.

Capital One Bank

The CFPB order Capital One Bank N.A. to refund more than 2 million customers a total of around $140 million, along with an additional $25 million in penalties. Their customers were reportedly misled or pressured into adding on credit card services that they didn’t understand, want, or even use. These services involved credit monitoring and payment protection, among others.

Avoiding the Tricks Major Credit Card Banks Use to Cheat You

Clearly, you should be cautious when working with big banks. One of the tricks major credit card bank use to cheat you is primarily found in add-on services and manipulative sales tactics. Always make sure that everything is laid out clearly for you before making any purchases so you can avoid this happening to you. Now that you’ve learned the tricks major credit card banks use to cheat you, however, you’ll be better prepared for the next time you open an account.

If you would like to talk about how you can acknowledge and avoid the tricks major credit card banks use to cheat you, Strategic Debt Relief can offer expert advice regarding your situation. Fill out our short application online and get an immediate response, or call us at 877-297-4477 for a free consultation today.