This past weekend I had the pleasure of speaking to a number of credit union marketing professionals. As a compliance attorney I was there to speak to them about marketing compliance and how to they can manage compliance when marketing products.
Credit cards are commonly discussed whenever I present on the subject of marketing compliance and this presentation was no different. Much to the dismay of the group of attendees I broke the news to them about “…prominent location closely proximate…” when advertising those AMAZING introductory or promotional rates/fees that draw in new cardholders. I refer to this as having “two peas in a pod” because the required information should be close to one another and of substantially similar size for the first listing of the promotional rate/fee.
The commentary to 1026.16(g) states the following:
“Prominent location closely proximate. For written or electronic advertisements, information required to be disclosed … [should be] in the same paragraph as the first listing of the promotional rate or promotional fee …[to be] deemed to be in a prominent location closely proximate to the listing.
Information disclosed in a footnote will not be considered in a prominent location closely proximate to the listing.”
As part of my workshop presentation I had attendees draft a marketing piece for an introductory or promotional rate credit card. A number of attendees placed the post-promotional rate in the disclosures of the marketing piece, which is not considered prominent or proximate. So remember, when you are drafting your next marketing piece for that great 0%APR introductory rate for 6 months credit card, you must include the post-promotional rate with it.
So can you include the 0%APR introductory rate in type size 24 and the post promotional rate in type size 12? This bring up another piece of commentary which addresses the clear and conspicuous standard. “A clear and conspicuous disclosure means that the required information … is disclosed with equal prominence and in close proximity to the promotional rate or payment to which it applies.”
The commentary further addresses the advertisement of promotional and post-promotional rates:
” If the information in §1026.16(g)(4)(i) [when the promotional rate/fee will end] and, as applicable, (g)(4)(ii) [the APR that will apply after the end of the promotional period] and (g)(4)(iii) [the fee that will apply after the end of the promotional period] is the same type size as the promotional rate or promotional fee to which it applies, the disclosures would be deemed to be equally prominent.”
Have fun drafting your credit card marketing pieces, but remember first listing of a promotional rate/fee = two peas in a pod!