NAACP Statement on Bank of America’s Discontinuation of Selected Debt Cancellation ProductsAugust 24, 2012
(Washington, DC) – The NAACP released the following statement regarding Bank of America’s discontinuation of selected debt cancellation products:
“Debt cancellation products have largely replaced lines of credit in the nation’s financial services market. While these products, such as Credit Protection Plus and Credit Protection Deluxe, may temporarily minimize or remove a consumer's obligation to repay an outstanding credit card balance during periods of financial difficulty, consumers are often left with a larger long-term debt obligations," said Dedrick Muhammad, Senior Director of NAACP Economic Programs. "The Government Accountability Office has said that consumers paid nearly $2.4 billion dollars on 24 million accounts for these debt cancellation products and services. Fees for these products often exceeded 10% of the cardholder’s average monthly debt. These debt cancellation products are most harmful to vulnerable individuals and families impacted by current economic downturns and financial instability in our nation’s Main Street communities. They chip away at American working families’ disposable income in return for a product that may prove more harmful than helpful. We encourage the nation’s leading financial institutions to eliminate their debt cancellation products, replacing them with programs that will encourage financial education empowerment, and strengthen American communities.”
Founded in 1909, the NAACP is the nation's oldest and largest civil rights organization. Its members throughout the United States and the world are the premier advocates for civil rights in their communities, conducting voter mobilization and monitoring equal opportunity in the public and private sectors.