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CARD Act Dodge? AmEx Teams Up With Facebook

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It appears that the CARD Act is making a difference—at least, on college campuses where the law prohibits credit card and bank marketers from soliciting to students. The Federal Reserve recently reported a 17% drop in the number of credit cards issued by banks via college campuses and alumni associations.

That’s definitely progress. But there’s another huge gathering place for millions of college students, where the CARD Act has no jurisdiction, and where some banks and card companies are setting up virtual booths to attract young adults: Facebook. It makes total business sense; one in four Facebook users is between 18 and 25 years old, making the social network a prime platform for advertisers and marketers of all kinds to solicit their products and services to an influential audience.

[Related article: What the Credit CARD Act Means for the Under-21 Crowd]

Banks have been relatively slower to use Facebook as a marketing vehicle, but little by little they’re gaining presence. Most recently, American Express announced a creative pact with Facebook in which AmEx users can earn discounts and special deals reflecting their interests and “Likes,” on Facebook, as well as the interests and “Likes” of their Facebook friends. USA Today reports that the card company hopes the move will boost the number of people using AmEx cards, as well as “draw in new members who hear about cool deals from their Facebook pals.” A marketing expert, reflecting on the deal, also told USA Today that, “They’re making their brand relevant to Generation Y.”

I’m not sure how I feel about this. Nothing in the CARD Act addresses rules for marketing online to young adults under the age of 21 and college students. Should banks be held to specific marketing limitations on sites like Facebook, where most students have accounts? On the one hand, it’s not like they’re offering students credit cards or freebies to sign up, but they are still marketing to them—in a place that’s more populated with students year-round compared to college campuses. The House Financial Services Committee did not return my emails asking how it feels about the migration of bank marketers to social networks. “Dislike.”

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