Top 4 Compliance Issues for Credit Card Issuers Across the Web

#4 - OUTDATED APR

The fourth most remediated category for credit card issuers is outdated APRs. 

Under the Truth in Lending Act (TILA), lenders are required to disclose the APR accurately and uniformly in all of their marketing materials, including advertisements, application forms, and credit agreements.

Similarly, the Credit Card Accountability Responsibility and Disclosure Act (CARD Act) requires credit card issuers to provide clear and conspicuous disclosures of credit card terms and fees, including APRs.

Since APRs are a key factor for consumers to determine the cost of credit and help them compare credit products, an inaccurate APR rate can be deceptive and harm consumers.

#3 - NO INTEREST

The third most remediated term for credit card issuers is the term “no interest.” This term could be considered deceptive or misleading if the offer is not truly interest-free. 

For example, issuers often run promotional periods during which no interest is charged on purchases or balance transfers, but after the promotional period ends, interest charges will apply. In this case, if a credit card issuer advertises "no interest" without disclosing the specific terms and conditions of the promotion, it could be viewed as a violation of truth in advertising laws or consumer protection regulations. 

#2 - INSTANT/AUTOMATIC APPROVAL

The second most commonly remediated terms for credit card issuers are those around “instant” or “automatic” approvals. 

These terms essentially boil down to two main compliance concerns.

The first concern is that almost no one can promise approval for consumers without first looking at their financial situation, whether it’s instant or not. There are a number of different factors that are considered when it comes to approval, and organizations cannot mislead consumers by guaranteeing approval without prior analysis of their financial decisions. 

The second concern is that the terms “instant” and “automatic” are typically interpreted by consumers to mean within seconds or minutes. In many cases, approval can take anywhere from a few hours to a few business days. 

Instead, many clients instruct their merchants to replace language like “instant approval” or “instant financing” with phrases such as “instant decision” or “instant loan decisioning.” This way, consumers won’t be misled into thinking that they’ll get approval no matter what and level sets their expectations. 

#1 - MISSING ISSUER NAME

The number one most commonly flagged and remediated violation for credit card issuers was missing issuer name.

Regulation Z requires credit card issuers to disclose certain information to consumers, including the name of the creditor or issuer.

Specifically, TILA requires that credit card solicitations and applications prominently display the name of the creditor or issuer, along with other information such as the APR, fees, and other important terms.