Among the laws and regulations such a practice may violate are the Federal Trade Commission Act’s unfair and deceptive acts and practices, known as UDAP, NCUA Truth In Savings Act requirements and NCUA’s own advertising rule.ALEXANDRIA, Va. – NCUA said last week that credit unions that charge fees for automatic identity theft protection programs as part of their free checking may be guilty of unfair and deceptive practices and need to disclose the fees and allow members to opt-in.
A credit union, said NCUA in a new legal opinion, “should not assess such charges unless it is clearly within its contractual rights and has met all the relevant requirements of applicable laws.”
Under the proposal, a credit union would automatically enroll its members, without the members’ request or consent, to receive certain services, including identity theft protection, on free checking accounts. The credit union would deduct periodic fees from the members unless the members choose to opt out of receiving the services. The truth-in-savings disclosure would list a $1 monthly fee for the services but describing the fee as optional.
Among the laws and regulations such a practice may violate are the Federal Trade Commission Act’s unfair and deceptive acts and practices, known as UDAP, NCUA Truth In Savings Act requirements and NCUA’s own advertising rule.
