Banks Probe Regulatory Limits of Credit Card Add-Ons

Post on September 17, 2013

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Several banks have since halted sales of such credit card add-ons, and the industry is now bracing for additional enforcement actions relating to the products.

Undeterred, American Express, Wells Fargo (WFC) and Citigroup (NYSE:C) appear to be testing how much wiggle room regulators have left them in the lucrative but oft-criticized business.

The sale of such add-on products is “something we thought was going to go away, but has not,” says Doug Miller, an analyst with Corporate Insight, which tracks financial companies’ customers communications.

Specifically, American Express has swapped one add-on service for another, while Wells Fargo (WFC) and Citigroup (NYSE:C) are continuing to offer forms of payment and identity theft protection. All other top-tier U.S. credit card lenders have stopped marketing add-ons credit card services online to new customers, Corporate Insight says.

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