LowCards.com Weekly Credit Card Update–April 7, 2017

LowCards.com Weekly Credit Card Update–April 7, 2017

April 7, 2017         Written By Lynn Oldshue

Amazon Cash to Allow Customers to Trade Cash for Online Credit
Amazon on Monday announced Amazon Cash, a service that will allow customers to forego using credit or debit cards, and add cash to their account balance at participating retailers. Customers will be able to show cashiers in certain stores, including CVS Pharmacy and Speedway, a barcode associated with their Amazon account, which will allow the customer to pay cash to the cashier to add funds to their account balance on the electronic commerce’s website. Customers can deposit from $15 to $500 into the Amazon account by trading in cash per transaction. Amazon said the funds will appear immediately and there is no fee to use Amazon Cash. Each customer receives one barcode for use with Amazon Cash associated with an Amazon account. Story by Andrew V. Pestano for UPI

Proposed Legislation Could Erase Credit Card Interest in U.K.
In the U.K., the Financial Conduct Authority (FCA) has proposed new legislation that would require credit card companies to cancel interest and charges for individuals with longstanding debt. Companies would also have to work with individuals to help them create faster repayment plans. The FCA defines those in “perpetual debt” as individuals who have paid more in interest and charges than they have toward their balance in an 18-month period. They estimate 3.3 million people in the U.K. are in this predicament. Story by John Oldshue for LowCards.com

Prepaid Debit Card Company to Pay $53 million Settlement over Deceptive Ads
Apply for a prepaid debit card, the company advertised, and approval is guarantee. Use the card the same day, it said; your money will always be available. But what NetSpend didn’t tell customers was that once money was loaded onto their cards, they may not be able to access it for days or even weeks, the Federal Trade Commission alleged. On Friday, the company, an affiliate of Total System Services, agreed to settle the FTC’s complaint, which was filed in U.S. District Court for the Northern District of Georgia. In the settlement, the company agreed to provide no less than $53 million in relief, consisting of $40 million on deposit in customer accounts and fees of $13 million. Story by Lois Norder for the Atlanta Journal Constitution

Starbucks Opens Mobile Order-Only Coffee Shop
Mobile ordering and order-ahead options are becoming a norm for today’s restaurants. Starbucks is taking this concept to the next level by opening a mobile order-only coffee shop in Seattle. The coffee shop will be inside the company’s headquarters, and will be open to the 5,000 employees at that location. Any mobile orders placed inside the building will be routed to the mobile-order window. No lines or places to orders, just a pickup area and a view of the baristas at work. Starbucks has two internal cafes in its headquarters. One ranks within the top three Starbucks locations in the country for mobile order volume. This makes the headquarters building the perfect place where the efficiencies of a dedicated mobile order shop can be tested. Story by Lynn Oldshue for LowCards.com

Oklahoma Cops Can Now Seize Money From Prepaid Debit Cards, Without Filing Criminal Charges
Law enforcement agencies in Oklahoma have purchased devices that allow police to seize and freeze funds electronically, which may dramatically expand their power to permanently confiscate property using asset forfeiture. Manufactured by the Texas-based ERAD Group, the devices work on “open loop” prepaid debit cards, like those offered by Visa or American Express. However, “debit cards attached to a valid checking account or valid credit cards cannot be processed” by an ERAD (Electronic Recovery and Access to Data) system. Oklahoma law allows police and prosecutors to keep up to 100% of the proceeds from forfeited property, even if the owner was never convicted or indicted. Records obtained by the Institute for Justice show that in 2012, 70% of all forfeiture expenditures in Oklahoma funded salaries for law enforcement. The Oklahoma Department of Public Safety says it installed 16 prepaid card readers last month but has yet to seize cash with them. Story by Nick Sibilla for Forbes

Teaching Hospitals are Prime Targets for Data Breaches
Larger hospitals and those with major teaching status are the most at-risk for a data breach, according to a Monday report by the Journal of the American Medical Association. The report highlights why institutions with greater access to data are being targeted by hackers. There were 216 hospitals included in the 1,798 breaches that occurred between Oct. 21, 2009 and Dec. 31, 2016, and more than a third were teaching hospitals. Additionally, 33 hospitals, or 15 percent, reported more than one breach. Of the 141 affected acute care hospitals, 52 were major academic medical centers. Also, about 20,000 patients were affected in 24 of the 216 breached hospitals, and six hospitals had over 60,000 breached patient records. Story by Jessica Davis for HealthCare IT News

Citigroup’s Drop in Branch Rankings Highlights Move Upmarket
Citigroup has dropped out of the top 15 banks by branches in the US, underscoring its post-crisis shift upmarket as it focuses on serving wealthier customers at home and abroad. Under its former leaders John Reed and Sandy Weill, Citi aimed to become a financial supermarket, offering everything from checking accounts to multibillion-dollar derivatives contracts, all under one roof. But since its near-death experience during the financial crisis the New York-based bank has tried to build its wholesale and credit card businesses within the US, while radically trimming its retail banking network around the world. Citi ranked 16th by number of branches in the US with 756 at the end of June last year, according to data from the Federal Deposit Insurance Corporation. Story by Ben McLannahan for the Financial Times

A New Credit Scoring Model Is On the Way
A new credit scoring model—expected to roll out in fall 2017—aims to more accurately measure credit risk by using more historical data and machine-learning techniques while culling less reliable information. On Monday, VantageScore Solutions announced the release of the fourth version of its credit scoring model, to be used by the three national credit bureaus. VantageScore 4.0 improves on its predecessor in three main ways. First, it looks at a consumer’s credit behavior over time, incorporating more of what’s known as “trended data.” For example, the score takes into account how a consumer’s credit balance has changed over a period of months, rather than taking a single snapshot in time. The new model also excludes a lot of public record information, especially liens and judgments. With this new model, medical collections won’t be reported on credit files until after six months have passed. That’s because there is often confusion as to whether the consumer or insurer is responsible for the payment. The third big update is the use of machine-learning techniques to help score consumers with thin credit files. VantageScore used large data-processing platforms to examine thousands and thousands of combinations of consumer behaviors to identify which ones were associated with people paying their bills on time. Story by Myles Ma for Yahoo Finance

18 States Urge Congress Not To Stop Prepaid Card Reforms
Earlier this year, lawmakers on Capitol Hill began the process of dismantling the Consumer Financial Protection Bureau’s long-awaited prepaid card rules—meant to improve transparency and curb runaway fees—that are set to go into effect. As Congress prepares to consider three bills that would erase these rules, attorneys general from 18 states have called on legislators to put consumers’ needs over those of the prepaid card industry. In an eight-page letter to Speaker of the House Paul Ryan and the majority and minority leaders of both the House and Senate, the state AGs argue for preserving the consumer protections that would be granted under the CFPB’s prepaid card rules. Story by Ashlee Kieler for Consumerist

Credit Card Complaints in US on the Rise
The CFPB’s latest month snapshot report highlights credit card complaints, of which 116,000 have reached the CFPB since July 2011. Credit card complaints account for 10% of all complaints received by the CFPB. Credit cards stand as the fourth-most-complained-about product. The average monthly number of credit card complaints increased 17% between December 2016 and February 2017 compared with the same three-month period a year ago. Billing disputes account for 17%of those credit card complaints, the CFPB says. Story by Banking Technology

LowCards.com Weekly Credit Card Rate Report
Based on the 1,000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 15.21 percent, identical to last week. Six months ago, the average was 14.61 percent. One year ago, the average was 14.80 percent.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for LowCards.com for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue
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