The CFPB announced that Bank of America has agreed to pay $772 million in refunds and penalties for deceptive credit card practices. Please don’t stop reading just because the case involves a big bank and credit card issues. The deceptive practices in this case involved debt cancellation and identity theft monitoring products which may be a concern for banks of any size and for many products other than credit cards.
A simple rule for deciding whether to offer a particular add-on product – is the product a product you would buy for yourself? If not, why do you offer it to your customers? Sure, you may make a few sales and earn a few bucks, but is it worth the risk of an Unfair Deceptive or Abusive Act or Practice (UDAAP) violation?
To stay safe always offer add-on products that you truly believe deliver value to your customers, offer the product at a reasonable price, and make sure your customer is fully aware of all costs and features of the product.
Note for members of our Compliance Masters Group – On Friday April 11, 2014 at 11:00 a.m. EDT Robin Cooper, Director of Compliance at Compliance Resource, LLC, is conducting a one hour Master-to-Master Peer Session on the topic of UDAAP. She will be joined by Matt Evans of Bankers Service Corporation. Together they will update members on the latest UDAAP news and suggestions for avoiding UDAAP problems.