American Express has decided to refund $85 million to customers and pay $27.5 million in fines to the Consumer Financial Protection Bureau and several other government agencies. The business was sued for wrongdoing that ran afoul of consumer financial laws and is the third charge card business to be sued by the fledgling CFPB.
CFPB suits annoy American Express
The primary goal of the CFPB is to shield consumers from financial services, but that does not just contain producing brand new legislation. In fact, a bunch of financial service providers are dealing with lawsuits for breaking laws associated with other companies.
The first Consumer Financial Protection Bureau targets have definitely been credit scar businesses. Over $200 million in settlements, mostly cash going to customers have been made in suits with Discover and Capital One already, according to NBC News.
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 Business and the Consumer Financial Protection Bureau. That lawsuit was recently settled.
Giving a ton to consumers
In the lawsuit, American Express is alleged to have broken numerous regulations. The charge card company was accused of discriminating against applicants over 35 years of age, making false claims about credit card rewards, charging late charges over legal limits and failing to report billing disputes to credit reporting organizations, a violation of regulations regarding debt collection and reporting.
The charge card company is ordered to pay $27.5 million in fines and $85 million back to customers in a refund.
One issue was with subsidiary American Express Centurian Bank who never gave customers the $300 reward promised for signing up for an American Express "Blue Sky" cad. CBS explained that the companies were charging late fees depending on a percentage too, according to CNN. The issue with that was that they were charging more than already established limits.
Age was a massive factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is recognized as discrimination.
Another issue with debt
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.
There are about 250,000 people who will obtain part of the $85 million allotted to refunds. They should, according to NBC News, obtain it in March 2013.
CFPB suits annoy American Express
The primary goal of the CFPB is to shield consumers from financial services, but that does not just contain producing brand new legislation. In fact, a bunch of financial service providers are dealing with lawsuits for breaking laws associated with other companies.
The first Consumer Financial Protection Bureau targets have definitely been credit scar businesses. Over $200 million in settlements, mostly cash going to customers have been made in suits with Discover and Capital One already, according to NBC News.
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 Business and the Consumer Financial Protection Bureau. That lawsuit was recently settled.
Giving a ton to consumers
In the lawsuit, American Express is alleged to have broken numerous regulations. The charge card company was accused of discriminating against applicants over 35 years of age, making false claims about credit card rewards, charging late charges over legal limits and failing to report billing disputes to credit reporting organizations, a violation of regulations regarding debt collection and reporting.
The charge card company is ordered to pay $27.5 million in fines and $85 million back to customers in a refund.
One issue was with subsidiary American Express Centurian Bank who never gave customers the $300 reward promised for signing up for an American Express "Blue Sky" cad. CBS explained that the companies were charging late fees depending on a percentage too, according to CNN. The issue with that was that they were charging more than already established limits.
Age was a massive factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is recognized as discrimination.
Another issue with debt
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.
There are about 250,000 people who will obtain part of the $85 million allotted to refunds. They should, according to NBC News, obtain it in March 2013.
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