Top Credit Card Compliance Issues Across the Web [With Examples]

The fourth most remediated category is inaccurate or unclear APR promotion. 

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.

In this example, the merchant is inaccurately promoting the credit card’s APR as “free money,” which could mislead consumers about the cost of borrowing. The post also fails to clearly disclose the APR after the initial 0% period and omits necessary disclosures about fees and terms.

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.  

In this example, the way that the merchant promotes “no interest” could potentially mislead consumers into thinking that there won’t be any interest charges associated with the card. While the terms that clarify the length of the promotional period do appear in the image, they’re very small and can easily be missed by consumers, which could lead to compliance violations.

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. 

In this example, the merchant is promising instant approval for this credit card, but approval is actually based on the consumer’s credit history and can take anywhere from 2 to 5 days. Since the language in this post would reasonably lead a consumer to believe that they would get approved instantly, this could lead to compliance issues.

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.