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Collectors Come in For Criticism in New Credit Card Report    
Industry News
 
Credit card collection practices come in for criticism in a new report issued Thursday by the National Consumer Law Center in Boston that discusses seniors and credit card debt.

Collectors “often initiate collection cases against consumers without any documentation of a credit card agreement signed by the consumer or even periodic statements to show transaction activity,” the report, which was funded by the Retirement Research Foundation, states. “This deprives the consumer of the ability to challenge erroneous transactions or demonstrate how much of the debt is due to purchases versus finance charges and junk fees.

Older Americans are falling deeper into debt because of credit card use, the study says. “Many older Americans are using credit cards as a plastic safety net, to make essential purchases that they cannot otherwise afford,” states the report.

The average credit card debt for people 65 to 69 has risen 217 percent between 1992 and 2001 to $5,844, the report states.

Among solutions it proposes to lower senior debt are increased use of debit cards, prohibition of such tactics as retroactive interest rate increases on credit cards, and better disclosure of credit card terms.

Shrinking incomes, rising housing costs and high credit card fees, high interest rates and special charges are combining to drive seniors deeper into credit card debt, the report contends.
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