The Consumer Financial Protection Bureau (CFPB) has raised concerns about the practices of major credit card companies, including American Express, JPMorgan Chase, and Bank of America, regarding the devaluation of credit card rewards points and airline miles. Consumers have reported the gradual erosion of their rewards’ value, exacerbated by inflation since the COVID-19 pandemic, leading to widespread dissatisfaction.

Key Points:

  • Devaluation of Rewards: Since 2020, the purchasing power of credit card points has decreased significantly, with reports showing that 50,000 points in 2020 were worth only around 41,300 points by October 2023.
  • Alleged Violations: The CFPB warns that these credit card issuers may be in violation of the law by failing to deliver the promised rewards. The agency has expressed concerns that fine print terms could unlawfully conflict with promotional advertisements, allowing issuers to cancel valuable rewards previously earned by consumers.
  • Action Against Issuers: The CFPB has already taken action against American Express and Bank of America for behavior related to their rewards programs, and continues to investigate practices across the industry.
  • Consumer Protection: Consumers have voiced concerns over the difficulties in redeeming rewards, the reduced value of points, and unclear or deceptive terms for earning or retaining rewards. The CFPB has emphasized the need for transparency in credit card rewards programs.

Impact:

This ongoing investigation could lead to legal actions and potential penalties for credit card companies found in violation of consumer protection laws. Cardholders who have experienced significant devaluation in their rewards or faced obstacles in redeeming them may be entitled to legal recourse.

Industry Response:

Industry groups, including the American Bankers Association, have dismissed these claims, arguing that complaints about credit card rewards are rare and accusing the CFPB of political overreach. As the CFPB continues its probe, the outcome may reshape how credit card companies advertise and manage their rewards programs.

Experience Matters

Sauder Schelkopf has a nationally recognized litigation practice. The firm currently serves as court-appointed lead counsel in courts across the country.  The attorneys at Sauder Schelkopf have recovered over $500 million on behalf of their clients and class members. Our firm was recognized by the Legal Intelligencer’s 2022 Professional Excellence Awards. The Legal Intelligencer’s Professional Excellence Awards honor Pennsylvania law firms and attorneys who have made a significant, positive impact on the legal profession. Our firm was named in the Litigation Departments of the Year (Specialty Area category; runner-up), an award that honors the best litigation practice in a small or mid-sized firm in Pennsylvania. This recognition was based on the firm’s 2021 litigation work and its important ongoing cases. LawDragon has recognized our attorneys in its list of the “500 Leading Plaintiff Consumer Lawyers” for 2022.  This list notes: “From the opioid epidemic to toxic substances and defective products, truck accidents to wildfires and sexual abuse, these are the lawyers who stand on the front line in individual lawsuits and class actions seeking justice.” Mr. Schelkopf was named to Pennsylvania’s Best Lawyers® 2022 for Class Actions/Mass Tort Litigation. The American Lawyer named Mr. Sauder to its 2021 Northeast Trailblazers. The honor recognizes 60 lawyers who are “truly agents of change.” It “recognizes professionals in the Northeast who have moved the needle in the legal industry.” The Legal Intelligencer named Mr. Sauder and Mr. Schelkopf in its 2020 Pennsylvania Trailblazers list recognizing 31 lawyers who “have taken extra measures to contribute to positive outcomes . . . and who are truly agents of change.” The Legal highlighted the firm’s innovative work on advocacy as class counsel in large institutional sex abuse cover-ups, women’s, and children’s rights. Our attorneys have also consistently been recognized by their peers being named to Pennsylvania SuperLawyer, a distinction held by the top 5% of attorneys in Pennsylvania.  Our attorneys have also been selected by the National Trial Lawyers Association as the Top 100 Trial Lawyers in Pennsylvania.

We Want to Hear from You

If you have been impacted by this behavior, contact the attorneys at Sauder Schelkopf by filling out the form on this page.