American Express has consented to refund $85 million to customers and pay $27.5 million in fines to the Consumer Financial Protection Bureau and several other government organizations. The business was sued for wrongdoing that ran afoul of consumer financial laws and is the 3rd charge card company to be sued by the fledgling Consumer Financial Protection Bureau.
American Express joins ranks of card businesses slapped with CFPB lawsuits
The main goal of the CFPB is to protect customers from financial services, but that does not just contain creating new legislation. In fact, a variety of financial service providers are dealing with suits for breaking laws associated with other companies.
Both Discover and Capital One have already faced lawsuits from the Consumer Financial Protection Bureau amounting to over $200 million in settlements. A lot of that cash is going back to customers according to NBC News. It seems credit card companies have been the first targets.
Another lawsuit was just recently settled with American Express too, according to CBS. However, the suit did not just include the CFPB. There were also complains from the Federal Reserve, regulators in Utah State, the Federal Deposit Insurance Business, and the Office of the Comptroller of Currency.
Consumers get fast cash
American Express is in trouble for breaking multiple laws, including failing to report billing disputes and laws about debt collection and reporting. It also charged late charges over legal limits and made false claims about rewards. Also, applicants over the age of 35 were discriminated against.
The charge card business is ordered to pay $27.5 million in fines and $85 million back to customers in a refund.
The brouhaha over late fees, according to CBS, was due to charging late charges depending on a percentage but, according to CNN, subsidiaries American Express Centurian Bank and American Express Bank set the rate in excess of already established limits. American Express Centurian Bank also offered $300 to qualified customers who were approved for an American Express "Blue Sky" card, which some customers never received.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was depending on age.
Also issue of debt procedures
American Express, American Express Bank and American Express Centurian Bank also told some customers that they could improve credit ratings by paying off debts that were at least 7 years old, which do not impact credit ratings. These violations, according to CBS, are said to have been going on from 2003 to this year.
In March 2013, about 250,000 people will get part of the $85 million concessions, according to NBC News.
American Express joins ranks of card businesses slapped with CFPB lawsuits
The main goal of the CFPB is to protect customers from financial services, but that does not just contain creating new legislation. In fact, a variety of financial service providers are dealing with suits for breaking laws associated with other companies.
Both Discover and Capital One have already faced lawsuits from the Consumer Financial Protection Bureau amounting to over $200 million in settlements. A lot of that cash is going back to customers according to NBC News. It seems credit card companies have been the first targets.
Another lawsuit was just recently settled with American Express too, according to CBS. However, the suit did not just include the CFPB. There were also complains from the Federal Reserve, regulators in Utah State, the Federal Deposit Insurance Business, and the Office of the Comptroller of Currency.
Consumers get fast cash
American Express is in trouble for breaking multiple laws, including failing to report billing disputes and laws about debt collection and reporting. It also charged late charges over legal limits and made false claims about rewards. Also, applicants over the age of 35 were discriminated against.
The charge card business is ordered to pay $27.5 million in fines and $85 million back to customers in a refund.
The brouhaha over late fees, according to CBS, was due to charging late charges depending on a percentage but, according to CNN, subsidiaries American Express Centurian Bank and American Express Bank set the rate in excess of already established limits. American Express Centurian Bank also offered $300 to qualified customers who were approved for an American Express "Blue Sky" card, which some customers never received.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was depending on age.
Also issue of debt procedures
American Express, American Express Bank and American Express Centurian Bank also told some customers that they could improve credit ratings by paying off debts that were at least 7 years old, which do not impact credit ratings. These violations, according to CBS, are said to have been going on from 2003 to this year.
In March 2013, about 250,000 people will get part of the $85 million concessions, according to NBC News.
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