American Express has consented to refund $85 million to consumers and pay $27.5 million in fines to the CFPB and many other government agencies. The company was sued for wrongdoing that ran afoul of consumer financial regulations and is the 3rd charge card company to be sued by the fledgling Consumer Financial Protection Bureau.
American Express joins ranks of card companies slapped with Consumer Financial Protection Bureau suits
The Consumer Financial Protection Bureau has already started a variety of lawsuits against financial service providers that have been breaking laws set by other organizations. The bureau is not just making new regulations to protect consumers.
Charge card businesses have thus far been first in the firing line. Suits involving the Consumer Financial Protection Bureau have been brought against Discover and Capital One, according to NBC News, both resulting in settlements in excess of $200 million, much of going to refunding customers.
CBS explained that one suit against American Express was filed by Utah state regulators, the Federal reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Company and the Consumer Financial Protection Bureau. That suit was recently settled.
$85 million returning to customers
There were a ton of regulations broken by American Express, such as discrimination of those over the age of 35, charging late charges over legal limits, violating regulations for debt collection and reporting, not reporting billing disputes as mandated by law and making false claims about rewards.
American Express agreed to refund $85 million to customers and pay $27.5 million in fines.
Subsidiaries American Express Bank and American Express Centurian Bank were in trouble because they charged a rate higher than legal limits for late charges, according to CNN. Instead of charging one fee, they charge a percentage, according to CBS. Also, $300 bonuses were offered to customers who got the American Express "Blue Sky" car, but customers did not receive that ever.
Age was a huge factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is recognized as discrimination.
Old debt procedures also cited
American Express, American Express Bank and American Express Centurian Bank also told some customers that they could improve credit ratings by paying down debts that were at least 7 years old, which do not impact credit scores. These violations, according to CBS, are said to have been going on from 2003 to this year.
According to NBC News, 250,000 people will get part of the $85 million in refunds. This will take place in March 2013.
American Express joins ranks of card companies slapped with Consumer Financial Protection Bureau suits
The Consumer Financial Protection Bureau has already started a variety of lawsuits against financial service providers that have been breaking laws set by other organizations. The bureau is not just making new regulations to protect consumers.
Charge card businesses have thus far been first in the firing line. Suits involving the Consumer Financial Protection Bureau have been brought against Discover and Capital One, according to NBC News, both resulting in settlements in excess of $200 million, much of going to refunding customers.
CBS explained that one suit against American Express was filed by Utah state regulators, the Federal reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Company and the Consumer Financial Protection Bureau. That suit was recently settled.
$85 million returning to customers
There were a ton of regulations broken by American Express, such as discrimination of those over the age of 35, charging late charges over legal limits, violating regulations for debt collection and reporting, not reporting billing disputes as mandated by law and making false claims about rewards.
American Express agreed to refund $85 million to customers and pay $27.5 million in fines.
Subsidiaries American Express Bank and American Express Centurian Bank were in trouble because they charged a rate higher than legal limits for late charges, according to CNN. Instead of charging one fee, they charge a percentage, according to CBS. Also, $300 bonuses were offered to customers who got the American Express "Blue Sky" car, but customers did not receive that ever.
Age was a huge factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is recognized as discrimination.
Old debt procedures also cited
American Express, American Express Bank and American Express Centurian Bank also told some customers that they could improve credit ratings by paying down debts that were at least 7 years old, which do not impact credit scores. These violations, according to CBS, are said to have been going on from 2003 to this year.
According to NBC News, 250,000 people will get part of the $85 million in refunds. This will take place in March 2013.
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