American Express has agreed to refund $85 million to customers and pay $27.5 million in fines to the CFPB and several other government organizations. The business was sued for wrongdoing that ran afoul of consumer financial laws and is the 3rd credit card business to be sued by the fledgling CFPB.
Card companies dealing with Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau has already started a bunch of lawsuits against financial service providers that have been breaking regulations set by other agencies. The bureau is not just creating brand new regulations to defend customers.
Credit card businesses have thus far been first in the firing line. Lawsuits 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 consumers.
American Express has just settled a comparable suit, brought by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Company, the Federal Reserve, and, according to CBS, regulators from the state of Utah.
Giving a ton to consumers
There were a ton of laws broken by American Express, such as discrimination of those over the age of 35, charging late fees over legal limits, violating regulations for debt collection and reporting, not reporting billing disputes as mandated by law and making false claims about rewards.
A refund will be needed for $85 million from American Express. The business will even be paying $27.5 million in fines for the problems.
Subsidiaries American Express Bank and American Express Centurian Bank were in trouble because they charged a rate higher than legal limits for late fees, according to CNN. Rather than charging one fee, they charge a percentage, according to CBS. Also, $300 bonuses were offered to consumers who got the American Express "Blue Sky" car, but customers did not get that ever.
American Express Centurian Bank also instituted a credit scoring system depending on age, which is contrary to anti-discrimination regulations.
Old debt practices also cited
American Express, American Express Bank and American Express Centurian Bank also told some consumers that they could improve credit scores by paying off debts that were at least 7 years old, which do not affect 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 concessions. This will occur in March 2013.
Card companies dealing with Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau has already started a bunch of lawsuits against financial service providers that have been breaking regulations set by other agencies. The bureau is not just creating brand new regulations to defend customers.
Credit card businesses have thus far been first in the firing line. Lawsuits 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 consumers.
American Express has just settled a comparable suit, brought by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Company, the Federal Reserve, and, according to CBS, regulators from the state of Utah.
Giving a ton to consumers
There were a ton of laws broken by American Express, such as discrimination of those over the age of 35, charging late fees over legal limits, violating regulations for debt collection and reporting, not reporting billing disputes as mandated by law and making false claims about rewards.
A refund will be needed for $85 million from American Express. The business will even be paying $27.5 million in fines for the problems.
Subsidiaries American Express Bank and American Express Centurian Bank were in trouble because they charged a rate higher than legal limits for late fees, according to CNN. Rather than charging one fee, they charge a percentage, according to CBS. Also, $300 bonuses were offered to consumers who got the American Express "Blue Sky" car, but customers did not get that ever.
American Express Centurian Bank also instituted a credit scoring system depending on age, which is contrary to anti-discrimination regulations.
Old debt practices also cited
American Express, American Express Bank and American Express Centurian Bank also told some consumers that they could improve credit scores by paying off debts that were at least 7 years old, which do not affect 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 concessions. This will occur in March 2013.
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