International Law

Consumer Credit Card Disclosure

Complex pricing of credit cards should be simplified

Interesting story from the Chicago Tribune about the effectiveness of disclosure regarding credit cards:

"The Byzantine complexity of credit card pricing structures makes it impossible for people to possibly use credit cards intelligently and responsibly. No amount of increased Truth-in-Lending disclosure or consumer financial literacy education will change this. I qualify as a savvy and dedicated reader of financial contracts, but frequently I cannot calculate with certainty the costs of carrying a credit card balance, and my calls to card issuers' 800-number servicing lines have done nothing to clarify matters. The lack of straightforward, easily comparable and understandable pricing is a major factor in the growth of credit card debt.

Several bills pending before Congress aim to help by banning abusive credit card pricing and billing practices. Some of this legislation would encourage a simplified, straightforward pricing structure for credit cards that allows consumers to easily compare cards apples-to-apples and to accurately weigh the potential costs of using a card for a transaction."

Franchise disclosure is 1/4 there: the UFOC has standardized items, but at the present there is no simple way to compare franchise systems with respect to these items.

Full post as published by Misleading Advertising Law on December 31, 2007 (boomark / email).