Young Consumer Protection in the 'Millennial' Age

Abstract

Over the past several years, young consumers have amassed increasing amounts of credit card debt – debt that many of them cannot afford to repay. Card companies’ aggressive solicitation efforts have contributed to this growing problem, as have their common practice of extending credit to young consumers without consideration of their ability to repay the debt. To address these concerns, Congress included specific provisions related to college-aged consumers in the recently enacted Credit Card Accountability Responsibility and Disclosure Act of 2009 (the “CARD Act”). The new provisions attempt to protect consumers under the age of twenty-one by requiring them to satisfy certain prerequisites before obtaining a card and by prohibiting card companies from using certain solicitation methods when marketing to college-aged consumers. This Article questions whether these provisions will provide meaningful protection for this group of consumers. In their attempt to address the problem of young consumer credit card indebtedness and the negative consequences that can often result from such debt, lawmakers failed to fully consider college-aged consumers’ traits and experiences that may have contributed to the development of the problem. Because of this oversight, this Article questions whether the CARD Act is sufficiently tailored to protect young consumers from the pitfalls of credit card debt. It suggests that as lawmakers endeavored to craft the CARD Act’s young consumer protections, it could have been informative and useful for them to have considered qualities that may place young consumers financially at risk, as well as the possible implications of their coming of age in the Millennial generation. Lawmakers’ consideration of such factors could have resulted in more beneficial protections than those currently included in the Act.

Keywords: CARD Act, credit cards, young consumers, college students, debt

JEL Classification: D18, G20, G28, H30, N20