Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Rules and Regulations 106277 

1See CFPB, The Consumer Credit Card Market 

(Oct. 2023) (hereinafter ‘‘2023 Report’’) at 98, 

https://files.consumerfinance.gov/f/documents/ 

cfpb_consumer-credit-card-market-report_2023.pdf. 

An industry survey found that rewards and cash 

back programs were the top reason why consumers 

chose one card over another, as well as the top 

reason consumers cited for increasing spending on 

credit cards over the last six months. PYMNTS and 

Elan, Credit Card Use During Economic Turbulence 

(Dec. 2023), https://www.pymnts.com/wp-content/ 

uploads/2023/05/PYMNTS-Credit-Card-UseDuring-Economic-Turbulence-May-2023.pdf. See 

also Arielle Feger, Cash-back rewards drive 

consumers to open new credit cards, eMarketer 

(Mar. 26, 2024), https://www.emarketer.com/ 

content/cash-back-rewards-drive-consumers-opennew-credit-cards; Drazen Prelec, How credit cards 

activate the reward center of our brains and drive 

spending, MIT Sloan (June 9, 2021), https://

mitsloan.mit.edu/experts/how-credit-cards-activatereward-center-our-brains-and-drive-spending. 

2 2023 Report at 99. One study also found that 

between 2021 and 2023, while total credit card 

applications decreased by 2 percent, applications 

for rewards cards and rewards cards with tiered 

earnings grew by 5 percent and 8 percent, 

respectively. Marketa Canayaz, Consumer Demand 

for Rich Rewards Rises, Comscore (July 17, 2024), 

https://www.comscore.com/Insights/Blog/ 

Consumer-Demand-for-Rich-Rewards-Rises. 

3 2023 Report at 100. See also Electronic 

Payments Coalition, New Study Shows LMI 

Households Rely on Credit Card Rewards, 

Electronic Payments Coalition (Apr. 30, 2024), 

https://electronicpaymentscoalition.org/2024/04/ 

30/new-study-data-shows-credit-card-rewards-area-lifeline-for-working-class-americans/. Despite the 

growth in the use of rewards cards among 

consumers with lower credit scores, in many cases, 

these consumers do not benefit from these rewards 

programs, and research has shown that consumers 

with higher credit scores generally benefit from 

credit card rewards programs at the expense of 

consumers with lower credit scores. See Sumit 

Agarwal, et al., Who Pays for Your Rewards? 

Redistribution in the Credit Card Market (Dec. 5, 

2022), http://dx.doi.org/10.2139/ssrn.4126641. 4CFPB, Credit Card Rewards (May 2024) 

(hereinafter ‘‘Credit Card Rewards Issue Spotlight’’) 

at 9, https://files.consumerfinance.gov/f/ 

documents/cfpb_credit-card-rewards_issuespotlight_2024-05.pdf. 

5 2023 Report at 100. Notably, consumers also 

forfeit about $500 million in rewards each year. Id. 

at 102. 

6See Rimma Kats, Survey Highlights Growing 

Consumer Appetite for Paying with Points, 

Payments Journal (Jan. 3, 2024), https://

www.paymentsjournal.com/survey-highlightsgrowing-consumer-appetite-for-paying-with-points/ 

(noting that a majority of consumers favor 

redeeming their points at grocery stores, online 

retail outlets, and at gas stations). See also Chase 

Survey Reveals How Credit Card Rewards Are 

Enhancing The Holiday Season, Chase Media 

Center (Nov. 20, 2023), https://media.chase.com/ 

news/chase-holiday-rewards-survey (noting that 

during the holiday season, 33 percent of consumers 

planned to use rewards to pay for gifts and 25 

percent on groceries for holiday meals). See, e.g., 

Bilt, How do I redeem points towards a down 

payment?, https://support.biltrewards.com/hc/enus/articles/10377953401869-How-do-I-redeempoints-towards-a-down-payment. 

7See Agarwal supra note 4, at 8. In 2021, more 

than one in three general purpose credit cards 

offered were co-branded. See 2023 Report at 25. In 

addition to rewards currencies and cash back, 

rewards programs also increasingly offer other 

affiliated benefits or lifestyle rewards, such as 

access to airport lounges and priority boarding. 

Credit Card Rewards Issue Spotlight at 8. 

8See CFPB, The Consumer Credit Card Market at 

212–13 (Dec. 2015), http://

files.consumerfinance.gov/f/201512_cfpb_reportthe-consumer-credit-card-market.pdf. 

9See id. at 213. 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Chapter X 

Consumer Financial Protection 

Circular 2024–07: Design, Marketing, 

and Administration of Credit Card 

Rewards Programs 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Consumer financial protection 

circular. 

SUMMARY: The Consumer Financial 

Protection Bureau (Bureau or CFPB) has 

issued Consumer Financial Protection 

Circular 2024–07 titled, ‘‘Design, 

marketing, and administration of credit 

card rewards programs.’’ In this circular, 

the CFPB responds to the question, 

‘‘Can credit card issuers violate the law 

if they or their rewards partners devalue 

earned rewards or otherwise inhibit 

consumers from obtaining or redeeming 

promised rewards?’’ 

DATES: The CFPB released this circular 

on its website on December 18, 2024. 

ADDRESSES: Enforcers, and the broader 

public, can provide feedback and 

comments to Circulars@cfpb.gov. 

FOR FURTHER INFORMATION CONTACT: 

George Karithanom, Regulatory 

Implementation & Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or at: https://

reginquiries.consumerfinance.gov/. If 

you require this document in an 

alternative electronic format, please 

contact CFPB_Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

Question Presented 

Can credit card issuers violate the law 

if they or their rewards partners devalue 

earned rewards or otherwise inhibit 

consumers from obtaining or redeeming 

promised rewards? 

Response 

Yes. Covered persons that offer, 

provide, or operate credit card rewards 

programs, and their service providers, 

may violate the prohibition against 

unfair, deceptive, or abusive acts or 

practices in a variety of circumstances, 

including instances where some of the 

conduct in question may be attributable 

to a third party, such as a merchant 

partner, and regardless of whether 

covered persons or service providers are 

taking actions consistent with rewards 

program terms. This circular provides 

some examples where covered persons 

that offer, provide, or operate credit card 

rewards programs, and their service 

providers, may violate the prohibition 

against unfair, deceptive, and abusive 

acts or practices, where: (1) the 

redemption values of rewards that 

consumers have already earned or 

purchased are devalued; (2) consumers’ 

receipt of rewards is revoked, canceled, 

or prevented based on buried or vague 

conditions, such as criteria disclosed 

only in fine print or up to the operator’s 

discretion; or (3) consumers have 

reward points deducted from their 

balance without receiving the 

corresponding benefit of the rewards, 

including due to technical failures when 

redeeming rewards points on merchant 

partners’ systems. 

Background on Credit Card Rewards 

Programs 

Rewards programs are increasingly 

used to encourage consumers to apply 

for and use specific credit cards.1 As of 

2019, more than 90 percent of general 

purpose credit card spending occurred 

on rewards cards, and by the end of 

2022, 75 percent of general purpose 

credit cards were rewards cards.2 While 

rewards cards are more common for 

consumers with higher credit scores, the 

use of rewards cards is growing fastest 

among deep subprime, subprime, and 

near-prime consumers.3 The amount of 

money or value that consumers earn and 

maintain in credit card rewards 

programs is also large and has increased 

substantially in recent years. For 

example, in 2022, consumers earned 

more than $40 billion in rewards from 

major general-purpose credit cards, 

more than a 50 percent increase from 

2019.4 Consumer rewards balances at 

the end of 2022 were more than $33 

billion, up 40 percent relative to the 

fourth quarter of 2019.5 More consumers 

are also using rewards to make 

payments, including for day-to-day 

purchases and necessary expenses.6

Credit card rewards programs are 

typically structured around earning 

rewards ‘‘currencies’’—most commonly 

‘‘miles’’ or other units of value issued by 

a co-brand partner (such as an airline or 

hospitality chain) or, alternatively, a 

credit card issuer’s own ‘‘points.’’ 7

Consumers typically earn miles or 

points through credit card spending or 

by directly purchasing them in 

accordance with pre-determined 

formulas, or ‘‘earn rates.’’ 8 Many issuers 

also offer promotional rewards through 

things like sign-up bonuses and 

referrals.9

Once earned or purchased by 

consumers, points can be redeemed for 

rewards like ‘‘cash back’’ (statement 


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106278 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Rules and Regulations 

10Credit Card Rewards Issue Spotlight, supra 

note 4, at 7. Both quantitative and qualitative 

evidence indicate consumers spend across months 

or years to earn sufficient points or miles for 

infrequent large purchases. See, e.g., id. at 15; 2023 

Report at 100. 

11See, e.g., American Express, Membership 

Rewards Program Terms and Conditions, https://

rewards.americanexpress.com/myca/loyalty/us/ 

catalog/tandc (last accessed Sept. 4, 2024); Citi, Citi 

ThankYou Rewards Terms & Conditions, https://

www.thankyou.com/cms/thankyou/ 

tc.page?pageName=tc (last accessed Sept. 4, 2024); 

Chase, Chase Sapphire Preferred® with Ultimate 

Rewards® Program Agreement, https://

www.chase.com/sapphire/rewardsagreement (last 

accessed Sept. 4, 2024); Wells Fargo, Wells Fargo 

Rewards® Program Terms and Conditions and 

Addendum, https://

consumercard.wellsfargorewards.com/#/tnc (last 

accessed Sept. 4, 2024); Southwest, What are the 

Rapid Rewards Rules and Regulations, https://

support.southwest.com/helpcenter/s/article/rapidrewards-rules-and-regulations (last accessed Sept. 

4, 2024) Emily McNutt, Delta is making it more 

expensive to earn elite status—here’s how you can 

bypass the new requirements, CNN (Aug. 28, 2023), 

https://www.cnn.com/cnn-underscored/travel/ 

delta-airlines-status-requirements-update; Sean 

Cudahy, Alaska Airlines raises lounge membership 

prices, tightens access, The Points Guy (Nov. 9, 

2023), https://thepointsguy.com/news/alaskalounge-restrictions/; Zach Griff, Why United’s 

increased status thresholds might not be as bad as 

they seem, The Points Guy (Nov. 11, 2022), https:// 

thepointsguy.com/news/united-premier-changesnot-so-bad/. 

12See, e.g., United Airlines, MileagePlus Investor 

Presentation, at 23 (June 15, 2020) (MileagePlus 

program can ‘‘adjust[ ] award pricing based on 

expected foregone revenue for United’’), https://

ir.united.com/static-files/1c0f0c79-23ca-4fd2-80c1- 

cf975348bab9; Delta Airlines, Delta Air Lines 

SkyMiles Investor Presentation, at 17 (Sept. 14, 

2020) (dynamic pricing model of SkyMiles rewards 

program allows ‘‘flexibility to control costs and 

preserve margins’’), https://www.sec.gov/Archives/ 

edgar/data/27904/000119312520244688/ 

d27099dex991.htm; American Airlines, American 

Airlines AAdvantage Investor Presentation, at 22, 

35 (Mar. 2021) (AAdvantage ‘‘control[s] the 

‘exchange rate’ between miles and dollars,’’ which 

provides flexibility to ‘‘manage costs’’ and ‘‘steer 

reward demand to optimal flights based on cash 

displacement risk.’’), https://www.sec.gov/Archives/ 

edgar/data/6201/000000620121000022/ 

aainvestorpresentation.htm. 

13See Jamie Lauren Keiles, The Man Who Turned 

Credit-Card Points Into an Empire, The New York 

Times (Jan. 5, 2021), https://www.nytimes.com/ 

2021/01/05/magazine/points-guy-travelrewards.html (how ‘‘as rewards programs have 

multiplied, the earned point has grown increasingly 

complex and fungible’’); Credit Card Rewards Issue 

Spotlight, supra note 4, at 6. 

14See Credit Card Rewards Issue Spotlight, supra 

note 4, at 11, 20; New York General Business Law 

§ 520–e (2023). 

15 In 2023, there was a more than 70 percent 

increase in complaints involving credit card 

rewards over pre-pandemic levels. Credit Card 

Rewards Issue Spotlight, supra note 4, at 2. 

16See, e.g., id. at 15, 16. 

17See, e.g., id. at 13. 

18See, e.g., id. at 15. 

19See, e.g., id. at 17. 

20See, e.g., id. at 18. 

21See, e.g., id. 

22See, e.g., id. 

23See, e.g., id. at 19. 

24 12 U.S.C. 5531(a); see also 12 U.S.C. 

5536(a)(1)(B). 

25 12 U.S.C. 5531(c)(1). 

26See, e.g., FTC v. Wyndham Worldwide Corp., 

799 F.3d 236, 246 (3d Cir. 2015). 

27See FTC v. Neovi, Inc., 604 F.3d 1150, 1158 

(9th Cir. 2010) (interpreting whether consumer’s 

injuries were reasonably avoidable under the FTC 

Act); Orkin Exterminating Co. v. FTC, 849 F.2d 

1354, 1365–66 (11th Cir. 1988) (same); Am. Fin. 

Servs. Ass’n v. FTC, 767 F.2d 957, 976 (D.C. Cir. 

1985) (same). 

28See CFPB v. Gordon, 819 F.3d 1179, 1192–93 

(9th Cir. 2016). 

29Novartis Corp. v. FTC, 223 F.3d 783, 786 (D.C. 

Cir. 2000) (quoting In re Cliffdale Assocs., Inc., 103 

FTC 110, 165 (1984)). 

credits or direct deposits) or transfers to 

a co-brand or merchant partner (e.g., 

miles or merchant-specific gift cards), 

and also for other types of goods or 

services, like buying merchandise, 

donating to charities, applying to 

purchases at check out, and others.10

However, both credit card issuers and 

loyalty programs generally reserve, and 

often assert a right to, unilaterally 

change the value of rewards, including 

at the point of redemption.11 Reward 

points or miles valuation changes can 

sometimes be tied to price changes in 

the underlying product or service for 

which the reward is being redeemed 

(e.g., changes in flight pricing), but 

program operators also adjust rewards 

redemption rates distinct from 

underlying prices, apparently as a 

means to ‘‘preserve’’ or ‘‘maintain’’ 

profit margins.12

As the market for credit card rewards 

programs has grown, so too has their 

complexity.13 Rewards program 

operators often assert their ability to 

unilaterally modify credit card rewards 

programs, which has caused at least one 

State to take action to provide 

consumers with additional protections 

against such unilateral program 

modifications.14 Additionally, the 

number of consumer complaints that the 

CFPB receives about credit card rewards 

programs has also risen dramatically in 

recent years.15 Many consumers’ 

complaints describe how the marketing 

or initial offering of a rewards program 

is inconsistent with their actual, later 

experiences earning and redeeming 

credit card rewards. For instance, 

consumers have complained to the 

CFPB about companies devaluing their 

rewards relative to what they were 

marketed, or increasing barriers to 

redeeming cash or cash-equivalent 

rewards, such as eliminating the ability 

for consumers to redeem points for a 

statement credit.16

Consumers have also complained 

about being denied access to 

promotional or other rewards because of 

terms or other requirements hidden in 

their cardholder or rewards program 

agreements, including instances of 

unexpectedly being found ineligible 

after applying for a credit card 17 or 

being forced to return a promotional 

offer because they closed their account 

within a certain period.18 For many of 

these types of complaints, companies 

and merchant partners justified 

revoking, canceling, or preventing 

consumer access to rewards through 

requirements and guidelines absent 

from their marketing materials and only 

found buried in their cardholder or 

rewards program agreements. 

Consumers have also repeatedly 

alerted the CFPB about difficulties 

redeeming their rewards or inexplicably 

seeing their points disappear. These 

reported challenges include issues with 

customer service,19 technical failures,20

and dispute resolution,21 all of which 

can be further compounded when 

neither the issuer nor its merchant 

partner accept responsibility and both 

refer consumers to the other.22 Because 

of these issues, some consumers have 

seen their rewards disappear when 

being transferred or applied to a 

merchant partner, with little recourse to 

resolve such problems.23

Analysis 

The CFPA prohibits any ‘‘covered 

person’’ or ‘‘service provider’’ from 

‘‘committing or engaging in an unfair, 

deceptive, or abusive act or practice 

under Federal law in connection with 

. . . the offering of a consumer financial 

product or service.’’ 24 An act or practice 

is unfair when: (1) it causes or is likely 

to cause substantial injury to consumers 

that is not reasonably avoidable by 

consumers and (2) such injury is not 

outweighed by countervailing benefits 

to consumers or to competition.25

Substantial injury includes monetary 

harm, and may be based on likely rather 

than actual injury.26 In general, an 

injury is not reasonably avoidable if 

consumers cannot reasonably anticipate 

the injury, or when there is no way to 

avoid the injury even if it is 

anticipated.27

Under the CFPA, a representation, 

omission, or practice is deceptive if it is 

likely to mislead a reasonable consumer 

and is material.28 Representations, 

omissions, or practices are ‘‘material’’ if 

they ‘‘involve[ ] information that is 

important to consumers and, hence, 

likely to affect their choice of, or 

conduct regarding, a product.’’ 29 In 

assessing the meaning of a 

communication, the CFPB looks to its 

overall, net impression; in other words, 

the CFPB considers the entire 

advertisement, transaction, or course of 

dealing rather than evaluating 


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30See, e.g., CFPB v. Aria, 54 F.4th 1168, 1173 (9th 

Cir. 2022); Gordon, 819 F.3d at 1193; FTC v. E.M.A. 

Nationwide, Inc., 767 F.3d 611, 631 (6th Cir. 2014); 

Fanning v. FTC, 821 F.3d 164, 170 (1st Cir. 2016). 

31FTC, Policy Statement on Deception (Oct. 14, 

1983). 

32See, e.g., Sterling Drug, Inc. v. FTC, 741 F.2d 

1146, 1154 (9th Cir. 1984) (advertisements referring 

to ‘‘unique formula’’ were deceptive because they 

could lead consumers to infer that pain reliever’s 

formulation was something other than ordinary 

aspirin); see also FTC v. Bay Area Business Council, 

Inc., 423 F.3d 627, 635 (7th Cir. 2005) (‘‘[T]the 

omission of a material fact, without an affirmative 

misrepresentation, may give rise to an FTC Act 

violation.’’). 

33FTC, Policy Statement on Deception (Oct. 14, 

1983). 

34 In 2022, rewards card spending was 90 percent 

of all consumer spending on general purpose credit 

cards. CFPB, The Consumer Credit Card Market, at 

99 (Oct. 2023), https://files.consumerfinance.gov/f/ 

documents/cfpb_consumer-credit-card-marketreport_2023.pdf. See also Background on Credit 

Card Rewards Programs, supra. 

35 Id. at 98. Because credit card rewards programs 

are offered or provided ‘‘in connection’’ with a 

consumer financial product or service (the 

extension of credit to consumers), the ‘‘covered 

persons’’ or ‘‘service providers’’ who offer, provide, 

or support such programs (hereinafter ‘‘rewards 

program operators’’) must comply with the CFPA, 

including its prohibitions against unfair, deceptive 

or abusive acts or practices, as well as other 

applicable consumer financial protection laws. In 

the typical case, a credit card issuer providing the 

rewards program would be a ‘‘covered person,’’ 

while ‘‘service providers’’ could include the 

partners or vendors that provide material services 

on the rewards program in connection with the 

credit card program, such as co-brand or merchant 

partners that deliver applicable rewards, or vendors 

who operate the key infrastructure or platforms for 

consumers to view, manage, and use their rewards 

earnings. See 12 U.S.C. 5481(6), 5481(26)(A). 

36While not specifically discussed in this 

circular, rewards program operators must also 

comply with the CFPA’s prohibition on abusive acts 

or practices, 12 U.S.C. 5531(d), which provides that 

an act or practice is abusive if it (1) materially 

interferes with a consumer’s ability to understand 

a term or condition of a consumer financial product 

or service or (2) takes unreasonable advantage of the 

consumer’s (a) lack of understanding of the material 

risks, costs, or conditions of the product or service; 

(b) inability to protect their interests in selecting or 

using a consumer financial product or service; or 

(c) reasonable reliance on a covered person to act 

in the consumer’s interests. 

37See, e.g., CFPB v. Ocwen Fin. Corp., No. 17– 

80495–CIV, 2019 WL 13203853 at *30 (S.D. Fla. 

Sept. 5, 2019) (finding that the CFPB sufficiently 

alleged CFPA violations regarding add-on products 

even where add-on vendor was responsible for 

enrolling borrowers to such add-on products); see 

also, e.g., FTC v. Bay Area Bus. Council, Inc., 423 

F.3d at 630) (affirming district court ruling that 

multiple interrelated corporate and individual 

defendants were liable under section 5 of FTC Act 

for deceptive telemarketing scheme); FTC v. Neovi, 

Inc., 604 F.3d 1150, 1155 (9th Cir. 2010) (‘‘a single 

violation of the [FTC] Act may have more than one 

perpetrator’’) (citing Bay Area). 

38See 16 CFR 238 et seq., FTC Guides Against 

Bait Advertising. Cf. Rossman v. Fleet Card (R.I.) 

Nat. Ass’n, 280 F.3d 384, 396–400 (3d Cir. 2002) 

(credit card issuer soliciting business with noannual-fee offer while intending to later impose fee 

constitutes a bait-and-switch scheme). 

39Cf. 24. FR 9755 (Dec. 4, 1959) (noting that FTC 

enforcement actions with respect to bait-and-switch 

schemes are brought under the FTC Act’s 

prohibition on ‘‘unfair or deceptive acts or 

practices’’); 32 FR 15540 (Nov. 8, 1967) (similar); 

Synopsis of Federal Trade Commission Decisions 

Concerning ‘‘Bait and Switch’’ Sales Practices 

(Sept. 23, 1975) (‘‘The Federal Trade Commission 

has determined that ‘bait and switch’ practices are 

unfair or deceptive trade practices and are unlawful 

under Section 5(a)(1) of Federal Trade Commission 

Act.’’), https://www.ftc.gov/system/files/ftc_gov/ 

pdf/NOPO-Bait-and-Switch.pdf. 

statements in isolation.30 A 

misrepresentation can be ‘‘an express or 

implied statement [that is] contrary to 

fact.’’ 31 It may also be deceptive, for 

example, when a seller partially 

discloses information about the nature 

of a product or service, but fails to 

disclose other material information.32

Further, ‘‘[w]ritten disclosures or fine 

print may be insufficient to correct a 

misleading representation.’’ 33

Rewards programs are a feature 

common to many credit cards, and tend 

to both be prominently marketed by 

issuers and widely used by 

consumers.34 Credit card rewards 

programs also play a major role in 

consumer’s choices on which cards to 

apply for and use for any given 

transaction.35

The CFPB is issuing this circular to 

underscore that the CFPA’s prohibition 

on unfair or deceptive acts or practices 

applies to the design, marketing, and 

administration of credit card rewards 

programs.36 Rewards program operators 

may violate this prohibition in a variety 

of circumstances regardless of whether 

they are taking actions consistent with 

rewards program terms. In particular, 

rewards program operators risk 

committing unfair or deceptive acts or 

practices when (1) rewards that 

consumers have already earned are 

devalued; (2) consumers’ receipt of 

rewards is revoked, cancelled, or 

prevented based on buried or vague 

conditions; and (3) rewards points are 

deducted without consumers receiving 

the corresponding benefit of the 

rewards. These examples are illustrative 

and non-exhaustive. 

As described further below, the CFPB 

emphasizes that covered persons that 

offer, provide, or operate credit card 

rewards programs may be liable for an 

unfair or deceptive act or practice where 

some of the conduct in question may be 

attributable to a third party or service 

provider, such as a merchant partner.37

Devaluation of Rewards Already 

Earned or Purchased 

Rewards program operators may 

commit an unfair or deceptive act or 

practice when they materially reduce 

the overall value of rewards that 

consumers have already earned or 

purchased. Consumers make decisions 

on whether to open or use a credit card 

based on the explicit and implicit 

representations about the value of card 

benefits and rewards. For instance, 

consumers’ reasonable expectations 

about the value of rewards may be 

informed by advertisements at account 

opening, as well as by redemption 

values of rewards communicated to 

consumers on or around the time the 

consumer makes decisions to purchase 

goods with the card and accrue rewards 

benefits. Furthermore, fine print 

disclaimers or contract terms stating 

that rewards program operators have the 

right to adjust rewards offerings often 

will not be sufficient to correct 

consumers’ net impression about the 

expected value of rewards. 

When rewards operators influence 

consumers’ expectations about the value 

of rewards in their product or marketing 

efforts (e.g., to support customer 

acquisition, retention, or increased 

purchase volume), but later make 

decisions to deflate the overall value of 

accrued rewards, they may have 

engaged in actions that resemble a 

traditional ‘‘bait-and-switch’’ scheme.38

These activities may constitute unfair or 

deceptive acts or practices under the 

CFPA.39

Enforcers investigating potentially 

unfair or deceptive acts or practice 

should consider a variety of different 

devaluation tactics by rewards program 

operators. Unfair or deceptive 

devaluations are easier to detect when 

the rewards program involves simple, 

fixed redemption rates with one retailer 

or merchant partner. But such schemes 

may be harder to detect where there are 

numerous potential rewards available or 

rewards program operators implement 

more complex program changes. For 

example, if a rewards program operator 

uses dynamic pricing for rewards 

redemptions, enforcers can examine 

whether the firm is unfairly or 

deceptively devaluing points over time 

by considering, for example, whether 

the dynamic prices in points have 

increased, in aggregate, relative to 

dynamic cash prices for the same 

products or services. Similarly, if a 

rewards program includes redemption 

options from multiple participating 

merchant partners, and the rewards 

program operator loses a major 

merchant partner or a major partner 

materially downgrades the service 

provided, enforcers can look to whether 

the rewards program operator is taking 

reasonable measures to generally 

maintain the value of rewards, such as 

by increasing points usable at other 

merchant partners, allowing customers 

to cash out points, replacing lost 

rewards with other rewards, or by other 


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40See, e.g., U.S. DOT, USDOT Requires Alaska 

and Hawaiian Airlines to Preserve Rewards Value, 

Critical Flight Service as Merger Moves Forward 

(Sept. 2024), https://www.transportation.gov/ 

briefing-room/usdot-requires-alaska-and-hawaiianairlines-preserve-rewards-value-critical-flight (in 

connection with regulatory merger approvals, 

Department of Transportation imposed ‘‘rewards 

protections against devaluation,’’ including 

requiring each earned loyalty program be converted 

to new program miles at 1:1 ratio and prohibiting 

‘‘any actions that would devalue HawaiianMiles 

miles’’). The merger approval and requirements 

were based on ‘‘[p]ublic interest criteria [that] 

include preventing unfair, deceptive, predatory or 

anticompetitive practices. . . .’’ Id. 

41See, e.g., Capital One Financial Corporation, 

Annual Report (Form 10–K) (Feb. 24, 2023) (‘‘We 

use the weighted-average redemption cost during 

the previous twelve months, adjusted as 

appropriate for recent changes in redemption costs, 

. . . to estimate future redemption costs.’’). 

Similarly, informational websites aimed at 

consumers may also estimate rewards point values. 

See, e.g., The Points Guy, TPG launches new datadriven valuations for 6 major US airlines—and 

updates methodology for credit card currencies 

(Sept. 8, 2023), https://thepointsguy.com/news/ 

new-data-driven-valuations/. 

42Additionally, rewards program terms that 

include unlawful or unenforceable conditions may 

violate the CFPA’s prohibition on deceptive acts or 

practices. CFPB Circular 2024–03, Unlawful and 

unenforceable contract terms and conditions (June 

2024), https://www.consumerfinance.gov/ 

compliance/circulars/consumer-financialprotection-circular-2024-03/. For example, the 

recently enacted New York statute referenced above 

may render certain terms in rewards program 

deceptive with respect to New York residents. 

43See Credit Card Rewards Issue Spotlight, supra 

note 4, at 14. 

44 Id. at 20. 

45See FTC, Bringing Dark Patterns to Light, at 7 

(Sept. 2022) (‘‘Some dark patterns operate by hiding 

or obscuring material information from consumers, 

such as burying key limitations of the product or 

service in dense Terms of Service documents that 

consumers don’t see before purchase.’’), https://

www.ftc.gov/system/files/ftc_gov/pdf/P214800%

20Dark%20Patterns%20Report%209.14.2022%20- 

%20FINAL.pdf. Cf. FTC v. Amazon.com, 2024 WL 

2723812 at *1 (W.D. Wash. 2024) (denying motion 

to dismiss of claims brought under Section 5 of the 

FTC Act and the Restore Online Shoppers’ 

Confidence Act based on defendants ‘‘trick[ing], 

coerc[ing], and manipulat[ing] consumers . . . by 

failing to disclose the material terms of the 

subscription clearly and conspicuously and by 

failing to obtain consumers’ informed consent 

before enrolling them’’); FTC v. Publishers Clearing 

House LLC, No. 23–CV–4735 (E.D.N.Y. June 6, 

2023) (complaint) (alleging defendant ‘‘employs 

dark patterns throughout the consumer’s experience 

by, among other things . . . placing disclosures in 

small and light font and in places where a 

consumer is unlikely to see them’’). 

46CFPB research suggests consumers lose 

hundreds of millions of dollars in earned rewards 

each year. 2023 Report, at 102. 

47See FTC v. Neovi, 604 F.3d at 1158; Am. Fin. 

Servs. Ass’n v. FTC, 767 F.2d at 976. 

48See, e.g., FTC v. Commerce Planet, Inc., 878 F. 

Supp. 2d 1048, 1079 (C.D. Cal. 2012) (consumers 

could not reasonably avoid injury where sign-up 

pages did not adequately disclose negative option 

plan by burying in separate fine print disclosures). 

49Credit Card Rewards Issue Spotlight, supra 

note 4, at 4, 11. 

50 Id. at 12–13. 

means. Additionally, when two firms 

merge, resulting in a conversion of one 

firm’s customers into a new rewards 

program, enforcers can look at whether 

the resulting firm took actions to 

convert customers’ points to the new 

system without a reduction in points 

value.40

In any investigation into whether a 

rewards program operator has engaged 

in an unfair or deceptive devaluation 

scheme, enforcers are encouraged to 

collect and consider accounting or other 

metrics maintained by program 

operators or others regarding rewards 

values. For example, many companies 

maintain internal figures on the dollar 

value of outstanding rewards for 

accounting purposes, including an 

estimated cost-per-point or weighted 

average redemption cost.41 If a firm’s 

cost-per-point or weighted average 

redemption cost decreases over time, 

that could suggest a firm has engaged in 

a bait-and-switch or similar unfair or 

deceptive act or practice. 

The CFPB emphasizes that covered 

persons that offer, provide, or operate 

credit card rewards programs may be 

liable for an unfair or deceptive act or 

practice even when the material 

devaluation of rewards could arguably 

be attributed to the actions of a third 

party. In other words, if a covered 

person that offers, provides, or operates 

a credit card rewards program makes 

explicit or implicit representations 

about, and thereby induces consumer 

expectations regarding, the value of the 

card benefits or rewards, and the value 

of those benefits or rewards is 

subsequently materially reduced by 

actions that may be attributable to the 

covered person’s merchant partner, the 

covered person may be liable for an 

unfair or deceptive act or practice. 

Hidden Conditions 

Rewards program operators also risk 

committing unfair or deceptive acts or 

practices when they revoke or cancel 

rewards, or prevent the award of 

rewards, based on buried or vague 

conditions.42 Rewards programs have 

become increasingly complex, with 

lengthy terms and unintuitive 

restrictions that consumers may not be 

aware of as they use their credit cards 

day to day. These lengthy terms may use 

buried or vague conditions set by 

rewards program operators that are nonnegotiable and may not be consistent 

with prominent promotional language 

advertising the rewards that consumers 

can earn. As noted above, consumer 

complaints received by the CFPB 

suggest that, despite descriptions in the 

fine print of rewards program terms, 

consumers often do not understand the 

basis of many rewards forfeitures or 

denials. 

The following are illustrative 

examples of potentially unfair rewards 

program practices: 

• Revoking or canceling rewards

based on vague catch-all language in 

program terms, such as ‘‘gaming’’ or 

‘‘abuse.’’ This can be especially 

problematic when those terms are also 

subject to the rewards program 

operator’s discretion.43

• Revoking previously earned

rewards based on policies that tie 

revocation to actions that are not within 

the consumer’s control and do not 

constitute fraud or misconduct by the 

consumer, like an issuer unilaterally 

closing an account.44

• Promotional ‘‘sign-up’’ offers that

are denied based on hidden conditions 

that consumers were not reasonably 

aware of, such as ‘‘churning’’ conditions 

that restrict how frequently a consumer 

can earn sign-up rewards, time periods 

to earn rewards that are effectively 

shortened by the hidden and 

unavoidable period of time needed to 

receive and activate a card, or 

promotional offers that are unavailable 

for applicants through certain channels. 

These sorts of dark patterns and fine 

print will often constitute deceptive 

representations, omissions, or practices 

about material concerns, and thus 

violate the prohibition on deceptive 

practices.45 In addition, denying or 

preventing rewards based on buried or 

vague terms could cause a substantial 

monetary injury in the form of lost 

rewards value and may be unfair.46

These injuries may not be reasonably 

avoidable by consumers where 

conditions are buried or vague, and 

accordingly hinder consumers’ ability to 

make a ‘‘free and informed choice.’’ 47

Specifically, consumers cannot 

reasonably avoid injuries where they are 

not ‘‘adequately informed’’ of key 

conditions or presented such 

information in a confusing way.48 As 

noted above, rewards program operators 

typically promote most prominently the 

availability of rewards, even more so 

than other key credit card terms, such 

as APR or annual fees, while putting 

conditions around rewards in fine 

print.49 Consumers may not understand 

the restrictive eligibility criteria buried 

in the fine print where program 

operators send marketing materials that 

target rewards promotions to the 

specific consumers.50 Similarly, a 

consumer may be confused by the way 

a rewards program operator interprets 

vague catch-all language, such as terms 

restricting rewards based on 

impermissible ‘‘gaming’’ or ‘‘abuse,’’ 


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51For instance, consumer complaints indicate 

rewards program operators may interpret as 

impermissible ‘‘gaming’’ or ‘‘churning’’ consumer 

card usage behaviors that are otherwise permissible 

under cardholder agreements and satisfy objective 

sign-up promotion criteria, such as closing an 

account after spending the required amount for a 

promotional rewards bonus. See id. at 14. 

52Notably, as with devaluation, the rewards 

program operators have already benefitted from the 

consumer spending on the relevant card by the time 

they deny the rewards benefits. 

53Cf. In re UniRush and Mastercard Int’l Inc., No. 

2017–CFPB–0010 (Feb. 1, 2017) (consent order) 

(finding that failures to adequately test and 

administer prepaid card program conversion were 

unfair acts or practices), https://files.consumer

finance.gov/f/documents/201702_cfpb_UniRushMastercard-consent-order.pdf. See also CFPB v. 

Ocwen Financial Corp., No. 17–80495–CIV, 2019 

WL 13203853 at *30 (S.D. Fla. Sept. 5, 2019) 

(finding that the CFPB sufficiently alleged CFPA 

violations regarding add-on products even where 

add-on vendor was responsible for enrolling 

borrowers to such add-on products); see also, e.g., 

FTC v. Bay Area Bus. Council, Inc., 423 F.3d at 630 

(affirming district court ruling that multiple 

interrelated corporate and individual defendants 

were liable under section 5 of FTC Act for deceptive 

telemarketing scheme); FTC v. Neovi, 604 F.3d at 

1155 (‘‘a single violation of the [FTC] Act may have 

more than one perpetrator’’) (citing Bay Area). 

54See Credit Card Rewards Issue Spotlight, supra 

note 4, at 19 (‘‘the ultimate value to consumers [of 

converting rewards points to miles or hotel points] 

depends on a quick and accurate conversion’’). 

55See id. at 17 (complaints received by CFPB 

indicate consumers spend time trying to resolve 

rewards issues through ‘‘repeated calls, hours on 

hold, and thorough documentation of the problem 

at hand’’). 

when those interpretations conflict with 

prominent promotional language or 

other representations.51 There are no 

countervailing benefits that outweigh 

the injury to consumers or competition 

of inducing consumers to use credit 

cards with vague or fine-print 

conditions that consumers cannot 

reasonably understand.52

Inability To Redeem Rewards 

Rewards program operators can also 

commit unfair or deceptive acts or 

practices when their customers lose 

their points because redemption 

procedures do not function properly. In 

offering rewards programs, operators 

make representations to consumers 

about how rewards can be redeemed, 

often developing online interfaces for 

consumers to use to redeem rewards. A 

rewards program operator is accordingly 

responsible for administering the 

rewards program it offers, including 

coordinating with its merchant partners 

or vendors, so that consumers can 

redeem the rewards that they have 

earned and selected in accordance with 

the rewards program.53

If systems failures result in consumers 

losing points when attempting to 

redeem, it may result in a deceptive 

practice because consumers would 

typically have a basis to reasonably 

believe they were purchasing products 

or services with their points, which 

would be false as a result of the failure. 

It would likely also be unfair because 

consumers would incur injury as a 

result of the loss of rewards, with no 

ability to avoid the harm and no 

countervailing benefits that outweigh 

the injury. Even if a rewards program 

operator ultimately refunds unredeemed 

points to a consumer, the consumer may 

be harmed by the consumer’s inability 

to redeem points in the interim,54 and 

often consumers end up expending 

significant time and resources trying to 

obtain the refund.55 Consumers cannot 

reasonably avoid these harms as they do 

not have control over operators’ rewards 

program administration, including 

procedures for redeeming points or 

converting them for use with co-brand 

or merchant partners. 

Again, the CFPB emphasizes that 

covered persons that offer, provide, or 

operate credit card rewards programs 

may commit an unfair or deceptive act 

or practice when the loss of points due 

to failures of redemption procedures 

could arguably be attributed to a 

merchant partner or service provider. 

For instance, a covered person may be 

liable for an unfair or deceptive act or 

practice when a consumer attempts to 

transfer rewards points from the online 

portal of such covered person to the 

points portal of a merchant partner (e.g., 

requests a ‘‘conversion’’ of credit card 

rewards points to points at a travel 

partner), but technical failures on the 

merchant partner’s system result in the 

consumer losing the points. 

About Consumer Financial Protection 

Circulars 

Consumer Financial Protection 

Circulars are issued to all parties with 

authority to enforce Federal consumer 

financial law. The CFPB is the principal 

Federal regulator responsible for 

administering Federal consumer 

financial law, see 12 U.S.C. 5511, 

including the Consumer Financial 

Protection Act’s prohibition on unfair, 

deceptive, and abusive acts or practices, 

12 U.S.C. 5536(a)(1)(B), and 18 other 

‘‘enumerated consumer laws,’’ 12 U.S.C. 

5481(12). However, these laws are also 

enforced by State attorneys general and 

State regulators, 12 U.S.C. 5552, and 

prudential regulators including the 

Federal Deposit Insurance Corporation, 

the Office of the Comptroller of the 

Currency, the Board of Governors of the 

Federal Reserve System, and the 

National Credit Union Administration. 

See, e.g., 12 U.S.C. 5516(d), 5581(c)(2) 

(exclusive enforcement authority for 

banks and credit unions with $10 

billion or less in assets). Some Federal 

consumer financial laws are also 

enforceable by other Federal agencies, 

including the Department of Justice and 

the Federal Trade Commission, the 

Farm Credit Administration, the 

Department of Transportation, and the 

Department of Agriculture. In addition, 

some of these laws provide for private 

enforcement. 

Consumer Financial Protection 

Circulars are intended to promote 

consistency in approach across the 

various enforcement agencies and 

parties, pursuant to the CFPB’s statutory 

objective to ensure Federal consumer 

financial law is enforced consistently. 

12 U.S.C. 5511(b)(4). 

Consumer Financial Protection 

Circulars are also intended to provide 

transparency to partner agencies 

regarding the CFPB’s intended approach 

when cooperating in enforcement 

actions. See, e.g., 12 U.S.C. 5552(b) 

(consultation with CFPB by State 

attorneys general and regulators); 12 

U.S.C. 5562(a) (joint investigatory work 

between CFPB and other agencies). 

Consumer Financial Protection 

Circulars are general statements of 

policy under the Administrative 

Procedure Act. 5 U.S.C. 553(b). They 

provide background information about 

applicable law, articulate considerations 

relevant to the Bureau’s exercise of its 

authorities, and, in the interest of 

maintaining consistency, advise other 

parties with authority to enforce Federal 

consumer financial law. They do not 

restrict the Bureau’s exercise of its 

authorities, impose any legal 

requirements on external parties, or 

create or confer any rights on external 

parties that could be enforceable in any 

administrative or civil proceeding. The 

CFPB Director is instructing CFPB staff 

as described herein, and the CFPB will 

then make final decisions on individual 

matters based on an assessment of the 

factual record, applicable law, and 

factors relevant to prosecutorial 

discretion. 

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2024–30988 Filed 12–27–24; 8:45 am] 

BILLING CODE 4810–AM–P 


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