Credit Card companies 'rate-jacking' consumers during bail-outPosted: Updated:
It arrived in Rich Stevens mailbox a few weeks ago. The notice he and his wife were being "rate-jacked" on their Citibank Visa cards.
"In my case, from 9.5 to 16.99 and, I'm not sure what her initial rate was, but up to 18.99" says Stevens.
Stevens doesn't know why, he's got great credit. But like thousands of credit card customers, he's been notified his rate is skyrocketing.
"It almost borders on loan-sharking from my perspective."
In the blogosphere, writers are livid at the instant skyrocketing rates-now dubbed "rate jacking." and Citigroup seems to be the target of the attacks. Partly because Citigroup began sending the notices right when they were getting bailed out from the government.
Citi told us anyone unhappy with the new rates can opt out, continue paying lower interest, but they must close their account when their card expires.
It's all in the fine print.
New York congresswoman Carolyn Maloney says she is sick of the fine print.
"They all have this provision that says they can raise the rate - anytime, any reason." she says.
In September, she got the house to pass the "credit card holders bill of rights", that would have stopped rate jacking and other fees that she says banks have been getting away with.
But the bill stalled in the senate.
"We have to keep working. We have to pass it. There's a lot of push back from the financial industry." says Maloney.
Connecticut senator Chris Dodd is the chairman of the Senate Banking Committee, where Maloney's bill has just sat since September.
Dodd has a similar bill to stop rate jacking, but even his own bill has been stuck in the committee since July.
Maloney says the pressure from the financial sector is intense. Dodd took in more than $4 million dollars from that financial sector during this last campaign.
Dodd's office had no comment about that but did say that he's tried repeatedly to protect consumers.