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Card issuers' policies of not commenting on unpopular practices will not necessarily work in their favor, at least not from a consumer-marketing point of view in these contentious times.
Consumer rage against the credit card industry is growing. Throw in the economic downturn and rising food and gas prices, and you have many consumers hating the credit card brands. The industry should be doing more to calm consumers' concerns, and one way to do that is by being more open to the public.
To illustrate the growing angst, the Federal Reserve Board says it received some 4,600 comments as of June 18 in response to its proposed credit card rules changes under the Unfair or Deceptive Acts or Practices regulation. The vast majority of those are from angry consumers. By comparison, when the Fed in June 2007 proposed substantial revisions to the credit card disclosures required under the Truth in Lending Act regulations, it received only about 2,500 comments, some 2,100 of them from disgruntled consumers.
Sure, many issuers do adequately notify customers before raising their interest rates. But many also use sneaky little tricks that contribute to the atmosphere of consumers feeling ripped off. These bad apples are doing nothing to help the industry, and the repercussions could come to haunt all issuers.
Most issuers prefer to hide behind a cloak, using statements such as "no comment" or "talk to the ABA" when asked about their views on how issuers should be addressing matters affecting the card industry. The American Bankers Association isn't helping, either, offering up boilerplate comments about how restricting issuers' options ultimately will restrict consumers' borrowing options. How is that helping issuers to counter the negative publicity they're facing?
The payments industry has a time-honored tradition of stonewalling and hiding in foxholes. Wouldn't a smart company try to offset the worst of the mud that's flying around with some feedback or positive marketing of some kind?
Apparently not. No issuer contacted by Cards&Payments took advantage of the opportunity to directly comment for our Cover story this month on the recent credit card bills introduced in Congress and policy changes proposed by the Fed
Congress and the Fed are talking, but their actions can speak louder than words.
Jeffrey Green
Editor-in-Chief
Cards&Payments
