You didn't think that the banks would actually abide the new "Credit Card Act", right?
Well, they do - kinda. But there was a Mack-Truck sized loophole in it, and now the fraudsters are back exploiting it:
Professional cards aren't covered under the Credit Card Accountability and Responsibility and Disclosure Act of 2009, or Card Act for short. Among other things, the law prohibits issuers from controversial billing practices such as hair-trigger interest rate increases, shortened payment cycles and inactivity feesbut it doesn't apply to professional cards (see table).
A "professional card" is supposedly for those who are, well, professionals. You know who they are - self-employed people primarily, along with those who use cards as a means of handling expense reports and similar, where their company reimburses them.
The problem is this - those cards are exempt from all the protections you thought you had as a result of this new so-called "Consumer Protection" legislation. You know, not being able to have your existing balances retroactively spike on interest rates, punitive over-limit or late fees, and similar shenanigans? Yep - all that stuff that was supposed to go away does not apply to these "professional" cards.
These offers used to be limited to people who could document an actual business or professional need. You know, like a FEIN for a business enterprise of some sort, or an address - or even a DBA name? Not any more - the applications now seem to have a checkbox that says "I'm a businessperson."
The problem here of course is that if you lie that's fraud. But what's a "lie" in this context, and doesn't the change to these applications amount to soliciting for a fraudulent act?
I think it does. Of course the banks will argue differently.
In support of their position perhaps they can explain how, as was noted in the article, a retired military member with no actual business got these solicitations?
This much I do know - I got three of them this week alone. I do have an LLC, but I have no reason whatsoever to apply for any of these so-called "credit lines."
Now I know why the junk mail with these offers has suddenly increased.
Oh, incidentally there is no clear disclosure in these solicitations that these cards are not subject to the protections of the CARD act - I looked.
Don't you think, CONgress and The Fed (which claims to be the "enforcer" of consumer protection), that the least you should do is require that these banks display in prominent 18pt bold type that these cards carry none of the protections under the law that consumer cards now have?
Naw, doing that would mean that people would have fair notice that the banks are trying to pull yet another evasion around what are supposed to be reasonable consumer protections.
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