Creditnet News Story
Schumer says companies offer business credit cards to consumers
Thursday, September 2, 2010
By William Davis
Since the Credit Card Accountability, Responsibility and Disclosure Act limited the ways issuers could offer new accounts to consumers, some have exploited a loophole in the law. Now one U.S. senator wants to close it.
According to a report from Bloomberg, New York Democratic Senator Charles Schumer has asked the Federal Reserve to change the Credit CARD Act to better protect consumers from the predatory corporate account offers of lenders.
"Credit card companies are purposely hawking corporate cards to consumers who don’t own a business and may even be retired," Schumer told the news source. "It is a dirty trick meant to get around the new credit card law."
Schumer sent a letter to the Federal Reserve asking it to require credit card issuers to verify that the people to whom they are sending offers run their own business, the report said. They would do so by providing federal tax identification numbers before they signed off on corporate card applications.
Consumers should be aware that a business account is not protected from predatory lending practices that were outlawed by the Credit CARD Act.
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