CFPB Issues Guidance to Rein in Rigged Comparison-Shopping Results for Credit Cards and Other Financial Products
The Consumer Financial Protection Bureau (CFPB) has issued a new circular to law enforcement and regulatory agencies detailing how operators of comparison-shopping platforms may break the law by steering users toward specific lenders in exchange for kickbacks. While consumers rely on these digital tools to weigh the costs, features, and terms of various financial products—such as bank accounts, loans, and credit cards—they frequently encounter manipulated results or digital dark patterns driven by undisclosed incentive payments. The circular outlines how these arrangements can violate federal law and provides examples of prohibited practices.
“Americans turn to online comparison tools to find the credit card with the lowest interest rates or best rewards,” said CFPB Director Rohit Chopra. “The CFPB is working to ensure that digital advertisements for financial products are not disguised as unbiased and objective advice.”
Digital comparison-shopping tools are widely utilized across numerous sectors, ranging from travel and retail to financial services. By enabling users to quickly and efficiently compare a variety of competing products, these platforms have the potential to benefit individual consumers while fostering broader market competition.
These tools can assist consumers in navigating complex financial decisions, particularly when searching for mortgages or credit cards. However, some operators exploit this reliance by manipulating search results. For instance, some platforms may accept financial kickbacks—often referred to in the industry as “bounties”—to influence the order or selection of products displayed to shoppers.
The CFPB previously released guidance regarding how real estate and mortgage regulations apply to mortgage comparison-shopping. In today’s circular, the agency clarifies how consumer financial protection laws apply to comparison tools for other financial products. Because these platforms can significantly influence a consumer’s final choice, and many claim to provide objective, unbiased advice, the guidance helps regulators evaluate operators that accept payments to manipulate results or suppress options that might better align with a consumer’s stated preferences.
Dark patterns are a common tool used to manipulate consumers. Operators of comparison-shopping tools may deceive consumers with user experiences and user interfaces that lead people to believe they are the beneficiaries of competition. However, if consumers are being tricked into paying higher prices or selecting inferior products, the comparison-shopping company and the company paying-to-play may be the only ones benefiting from the façade of competition.
The CFPB has warned that dark patterns can violate consumer financial protection laws, and the agency has taken enforcement actions against violators. The CFPB sued ACTIVE Network for illegally cramming consumers with junk membership fees, and sued TransUnion for using dark patterns to make it difficult for consumers to cancel certain subscription services. The Federal Trade Commission has also taken action, including a lawsuit against Credit Karma for tricking consumers with deceptive “Pre-Approved” credit offers.
The CFPB has uncovered evidence of potential anti-competitive behavior and high industry concentration within the consumer credit card market. A recent agency report revealed that large banks often provide inferior credit card terms and interest rates compared to smaller banks and credit unions, regardless of a borrower’s credit risk. This discrepancy can cost the average cardholder between $400 and $500 in additional annual interest. Furthermore, CFPB research indicates that the largest issuers have expanded their interest rate margins over the last decade, leading to approximately $25 billion in extra interest charges during 2023 alone.
To encourage greater competition in this sector, the CFPB is developing a consumer-facing tool that will eventually bring increased price transparency to credit card comparison-shopping. This will provide consumers with an unbiased method for comparing interest rates and card terms.
Today’s circular is part of a broader effort to level the playing field that is too often tilted against consumers across many different markets for consumer financial products and services. The guidance follows an advisory opinion to protect mortgage borrowers from pay-to-play digital comparison-shopping platforms. It also follows efforts to level marketplaces through actions on hard to cancel subscription services, fake review fraud, pay-to-pay fees, and hidden junk fees.
Read today’s circular.
Consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Employees who they believe their company has violated federal consumer financial protection laws are encouraged to send information about what they know to whistleblower@cfpb.gov.
The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit www.consumerfinance.gov.
