For Immediate Release:
Contact:
Wednesday, March 7, 2007
Travis Plunkett, Consumer Federation, 202-387-6121
Jennifer Fuson, Consumers Union, 202-462-6262
Ruth Susswein, Consumer Action, 301-718-2511
Ed Mierzwinski, USPIRG, 202-546-9707
Alys Cohen, National Consumer Law Center, 202-452-6252
LEVIN HEARING EXPOSES WIDESPREAD CREDIT CARD ABUSES
Consumer Groups Call for Congressional Action on Unjustifiable Fees, Outrageous Interest
Rates and Questionable Lending Practices
National consumer organizations today called on Congress to enact legislation to curb
abusive credit card lending practices highlighted in a hearing this morning by the Senate Permanent
Subcommittee on Investigations. The hearing was convened by Subcommittee Chairman Senator
Carl Levin and focused on how credit card issuers assess interest rates and fees.
“We applaud Chairman Levin for holding this crucial hearing to shine a light on the traps
and tricks that some credit card issuers use to pump up their profits,” said Travis Plunkett,
Legislative Director of the Consumer Federation of America. “The next step is for Congress to stop
credit card issuers from charging unjustifiable fees and outrageous interest rates that push consumer
to the financial brink.”
The hearing was based in part on a September 2006 report by the United States
Governmental Accountability Office (GAO.) The report detailed several questionable finance
charges, fees and disclosure practices associated with 28 popular credit cards. The report found that
large numbers of consumers were being charged fees, the number of new fees was increasing and
that the amount of the fees had risen much faster than inflation. For example, the report found that
the six largest credit card issuers charged 35 percent of their card holders late fees averaging $33.64
in 2005, up from $12.83 in 1995. The report also found that current fee disclosures are difficult to
understand