American Express has agreed to refund $85 million to customers and pay $27.5 million in fines to the CFPB and numerous other government agencies. The business was sued for wrongdoing that ran afoul of consumer financial laws and is the third credit card business to be sued by the fledgling Consumer Financial Protection Bureau.
Card corporations dealing with Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau has already started a lot of suits against financial service providers that have been breaking laws set by other organizations. The agency is not just making new regulations to shield customers.
Charge card businesses have thus far been first in the firing line. Suits involving the CFPB 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.
American Express has just settled a comparable lawsuit, brought by the CFPB, 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.
$85 million returning to customers
American Express is in trouble for breaking multiple regulations, including failing to report billing disputes and regulations 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.
A refund will be necessary for $85 million from American Express. The company will also be paying $27.5 million in fines for the issues.
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. 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 consumers did not receive that ever.
Age was a massive factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is known as discrimination.
Old debt practices also cited
Some consumers were promised that they would have an increased credit rating if they paid off debts older than 7 years, which do not impact credit scores at all. CBS explained that his has occurred since 2003 and still happened this year. The lies were being told at American Express, American Express Bank and American Express Centurian bank.
According to NBC News, 250,000 people will get part of the $85 million in refunds. This will happen in March 2013.
Card corporations dealing with Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau has already started a lot of suits against financial service providers that have been breaking laws set by other organizations. The agency is not just making new regulations to shield customers.
Charge card businesses have thus far been first in the firing line. Suits involving the CFPB 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.
American Express has just settled a comparable lawsuit, brought by the CFPB, 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.
$85 million returning to customers
American Express is in trouble for breaking multiple regulations, including failing to report billing disputes and regulations 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.
A refund will be necessary for $85 million from American Express. The company will also be paying $27.5 million in fines for the issues.
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. 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 consumers did not receive that ever.
Age was a massive factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is known as discrimination.
Old debt practices also cited
Some consumers were promised that they would have an increased credit rating if they paid off debts older than 7 years, which do not impact credit scores at all. CBS explained that his has occurred since 2003 and still happened this year. The lies were being told at American Express, American Express Bank and American Express Centurian bank.
According to NBC News, 250,000 people will get part of the $85 million in refunds. This will happen in March 2013.
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