LowCards.com Weekly Credit Card Update–February 8, 2013
California Supreme Court Makes it Easier for Apple, Online Businesses to Collect Personal Data
A divided California Supreme Court ruled that online merchants such as Apple and Ticketmaster can require consumers to furnish personal information to make credit card purchases. The Supreme Court found that a two-decade-old California consumer protection law does not apply to the multibillion-dollar online commerce world. Story by Howard Mintz for the Silicon Valley Mercury News.
Debt Collection Horror Stories
The U.S. Federal Trade Commission shut down a Texas-based debt collector last week for violating the Fair Debt Collection Practices Act by allegedly using deceptive and abusive scare tactics to force people to pay their payday loan debts. Many states have their own rules governing debt collector practices and preventing harassment. Story by Blake Ellis for CNN Money.
CFPB to Investigate Financial Products Aimed at College Students
The Consumer Financial Protection Bureau is launching an inquiry into the impact of financial products marketed to students through colleges and universities. Agreements between credit card issuers and institutions of higher education are now subject to public disclosure. But not a lot is known about the arrangements regarding other financial products marketed to students, such as student identification cards that double as debit cards, school-affiliated bank accounts, and cards used to access scholarships and student loans. Story by Bill Hardekopf of LowCards.com.
ID Theft/Fraud Ring Netted $200 Million
Prosecutors alleged that more than a dozen crooks ran roughshod over America’s credit system for six years, stealing hundreds of millions of dollars and living like kings. They invented Social Security numbers which were used to create fake credit reports, enabling them to borrow huge sums. They faked utility payment histories to fool credit bureaus, and designated themselves as “authorized users” of real victim’s identities; they tricked banks into depositing large sums of cash into bank accounts they controlled. With the proceeds of the scheme, they bought luxury cars, electronics, spa treatments, and millions of dollars in gold. Story by Bob Sullivan for NBC News.
U.S. Consumer Borrowing Up in December
Americans cut back sharply on credit card use, but increased borrowing in December to buy cars and attend school. Consumer borrowing rose $14.6 billion in December from November, the highest level on record. The increase was driven entirely by gains in student and auto loans. Credit card debt fell $3.6 billion. Total credit card debt has fallen roughly 17 percent since the July 2008. Story by Martin Crutsinger for the Associated Press.
Elizabeth Warren Not Ready to Back Down on CFBP
After a court ruling last month cast doubt on the legality of the fledging U.S. consumer bureau and its director, opponents have expressed hope that Senator Elizabeth Warren might agree to trim its powers in return for its survival. Warren signaled that she’s not yet ready to make that trade, although she didn’t rule any option in or out. Story by Cheyenne Hopkins for Bloomberg.
RBS Fined $612 Million in Rate-Rigging Scandal
A third major bank, Britain’s Royal Bank of Scotland, was fined £390 million or $612 million for rigging the London Interbank Offered Rate, commonly known as Libor. Investigators found that RBS traders in London, Singapore and Tokyo manipulated Libor from at least 2006 until 2010. RBS was bailed out during the financial crisis of 2008 and is now 81 percent owned by the British government. So the fines will be paid back by cutting the recent and future bonuses given to the bank’s management and employees. Story by Bill Hardekopf for LowCards.com.
Growth in Credit Card and Debit Transactions Lifts Visa Net Income
Visa said its profit jumped 25 percent in the last three months of 2012, as consumers used their credit cards and debit cards more often. Transactions processed over the Visa network totaled $14.2 billion during the quarter, an increase of 4 percent from a year earlier. While U.S. debit transactions fell 4 percent, debit and credit card transactions overseas jumped 21 percent. Story by Alex Veiga for The Associated Press.
LowCards.com Weekly Credit Card Rate Report
Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.35 percent, slightly above last week’s average of 14.33 percent. Six months ago, the average was 14.34 percent. One year ago, the average was 14.22 percent.