Credit card issuers have been put on notice by the Consumer Financial Protection Bureau (“CFPB”) that offering “add-on” products, such as debt protection, identity theft protection, credit score tracking, and other products, must comply with Federal consumer financial law. This compliance extends to the issuer’s service provider as well. Of note in the CFPB’s July 18, 2012, bulletin is the applicability of this compliance to those who offer similar products in connection with deposit services. The CFPB’s bulletin was issued as a result of consumer complaints of being misled by the marketing and sales practices associated with credit card add-on products, including the failure by issuers to adequately disclose important product terms and conditions, and enrollment in programs without the consumer’s affirmative consent, along with the payment of fees.

Federal financial laws implicated with these add-on programs include the Dodd-Frank Act prohibiting deceptive practices or acts. The CFPB considers the following factors in evaluating the effectiveness of disclosures at preventing consumers from being misled:

Under the Equal Credit Opportunity Act (“ECOA”) and its implementing regulation, Regulation B, creditors may not discriminate against an applicant in any aspect of a credit transaction on the basis of race, color, religion, national origin, sex, marital status, or age (provided the applicant has the capacity to contract). ECOA/Regulation B also provide that a creditor may not discriminate based on the fact that all or part of an applicant’s income derives from a public assistance program.

The CFPB identifies at least the following steps to ensure that the marketing and sale of credit card add-on products limit the potential for statutory or regulatory violations and related consumer harm:

The CFPB also identifies several recommendations for a compliance management program, to include: