Chargebacks & Refunds 2009

[StrokeKing]

Has anyone else considered the more-than-likely scenario that banks will begin to simply block/filter any non-tangible online transaction similar to what they are doing with gaming? Almost like reverse scrubbing I suppose.

[anasporn]

Originally Posted by StrokeKing

Has anyone else considered the more-than-likely scenario that banks will begin to simply block/filter any non-tangible online transaction similar to what they are doing with gaming? Almost like reverse scrubbing I suppose.

I doubt it's that coordinated or nefarious. All you need to do is look at the news the past year and see the names that are in trouble: Citibank, Bank of America, Chase, American Express ... you get the picture ... all the major credit card issuing banks.

Over the past 6 months I have been hearing anecdotal evidence that these credit card issuers are resorting to more and more desperate tactics as delinquency and default rates rise: reducing credit limits (sometimes to *below* the account balance!) and offering cardholders a discount to pay off their balances and close accounts.

The companies that issue and hold these credit card accounts are in dire financial straits, and have been since at least September when the credit markets seized up and unemployment began to spike.

A few posts up, I posted links to articles about credit card delinquency and default rates hitting record highs for the month of February. Soon the numbers for March will be released, and I am expecting the trend to continue with yet new record rates.

If pending legislation in the US congress gets passed and signed into law, look for even more troubles for the credit card issuing banks, as several of their nasty tricks are on the chopping block:
* universal default
* rate jacking
* double-cycle billing
* marketing to minors

Source article at CNNmoney

Even if the legislation fails again, universal default and double-cycle billing will be against Federal regulation in 2010.

[anasporn]

Originally Posted by anasporn

Over the past 6 months I have been hearing anecdotal evidence that these credit card issuers are resorting to more and more desperate tactics as delinquency and default rates rise: reducing credit limits (sometimes to *below* the account balance!) and offering cardholders a discount to pay off their balances and close accounts.

Anecdotal was just recently confirmed:

A new FICO study found that 11% of US consumers -- 22 million people -- have had their credit lines cut or accounts closed even though they have been paying their bills on time and retain a solid rating.

Don't have a link for it (yet) but was quoted in John Maudlin's weekly e-letter, and he is a very meticulous economic analyst.