American Express has decided to refund $85 million to consumers 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 regulations and is the third credit card company to be sued by the fledgling CFPB.
Consumer Financial Protection Bureau lawsuits annoy American Express
The CFPB isn't wasting much time getting stuck in and performing the job that it was created to do. Aside from making new regulations to better protect customers and proposing reforms, it has also started lodging suits against financial service providers that have fallen afoul of regulations, in conjunction with other federal agencies.
The first Consumer Financial Protection Bureau targets have surely been credit scar companies. 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.
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 Business, the Federal Reserve, and, according to CBS, regulators from the state of Utah.
Cash handed back
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 charge card rewards, charging late charges over legal limits and failing to report billing disputes to credit reporting agencies, a violation of laws regarding debt collection and reporting.
American Express decided to refund $85 million to consumers and pay $27.5 million in fines.
One issue was with subsidiary American Express Centurian Bank who never gave consumers the $300 reward promised for signing up for an American Express "Blue Sky" cad. CBS explained that the companies were charging late charges depending on a percentage too, according to CNN. The problem 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 considered discrimination.
Old debt practices also cited
American Express, American Express Bank and American Express Centurian Bank also told some customers that they could improve credit scores by paying off debts which 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.
In March 2013, about 250,000 people will get part of the $85 million concessions, according to NBC News.
Consumer Financial Protection Bureau lawsuits annoy American Express
The CFPB isn't wasting much time getting stuck in and performing the job that it was created to do. Aside from making new regulations to better protect customers and proposing reforms, it has also started lodging suits against financial service providers that have fallen afoul of regulations, in conjunction with other federal agencies.
The first Consumer Financial Protection Bureau targets have surely been credit scar companies. 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.
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 Business, the Federal Reserve, and, according to CBS, regulators from the state of Utah.
Cash handed back
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 charge card rewards, charging late charges over legal limits and failing to report billing disputes to credit reporting agencies, a violation of laws regarding debt collection and reporting.
American Express decided to refund $85 million to consumers and pay $27.5 million in fines.
One issue was with subsidiary American Express Centurian Bank who never gave consumers the $300 reward promised for signing up for an American Express "Blue Sky" cad. CBS explained that the companies were charging late charges depending on a percentage too, according to CNN. The problem 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 considered discrimination.
Old debt practices also cited
American Express, American Express Bank and American Express Centurian Bank also told some customers that they could improve credit scores by paying off debts which 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.
In March 2013, about 250,000 people will get part of the $85 million concessions, according to NBC News.
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