On June 10, the Federal Trade Commission has sued credit card issuer CompuCredit for deceptive marketing practices. The reason is that while many credit card companies have their formula for how they adjust the interest rate or credit score, CompuCredit makes its decision on purchasing behavior, not just payment history--and does so without telling the consumer.

The suit, for the most part focuses on CompuCredit's Aspire Visa, a subprime credit card for risky borrowers. The FTC claims that CompuCredit didn't properly disclose that it monitored spending and cut credit lines if consumers used their cards at certain places. Among them: tire and retreading shops, massage parlors, bars, billiard halls, and marriage counseling offices. According to this article from BusinessWeek, CompuCredit maintains that the FTC's lawsuit is without merit, and defends its practices. "Every time a consumer accesses their credit, a new decision to extend a loan is being made," says Rohit H. Kirpalani, CompuCredit's general counsel. "These scoring models are commonplace across the industry."

Doesn't it seem odd that taking steps to improve or salvage your marriage would hurt your credit score? You'd think it would improve your score since married couples statistically have a higher household income. We'll keep you posted as this story develops.

Labels: money, news