American Express has decided to refund $85 million to customers and pay $27.5 million in fines to the CFPB and several other government agencies. The business was sued for wrongdoing that ran afoul of consumer financial regulations and is the third charge card business to be sued by the fledgling CFPB.
Consumer Financial Protection Bureau suits annoy American Express
The main goal of the CFPB is to guard consumers from financial services, but that does not just contain creating brand new legislation. In fact, a bunch of financial service providers are dealing with suits for breaking laws associated with other companies.
The first Consumer Financial Protection Bureau targets have certainly been credit scar corporations. 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.
Another suit was just recently settled with American Express too, according to CBS. However, the lawsuit did not just contain the CFPB. There were also complains from the Federal Reserve, regulators in Utah State, the Federal Deposit Insurance Company, and the Office of the Comptroller of Currency.
Giving a ton to customers
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 laws for debt collection and reporting, not reporting billing disputes as mandated by law and making false claims about rewards.
The credit card company 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 fees based 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 consumers who were approved for an American Express "Blue Sky" card, which some customers never received.
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 customers 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.
In March 2013, about 250,000 people will get part of the $85 million concessions, according to NBC News.
Consumer Financial Protection Bureau suits annoy American Express
The main goal of the CFPB is to guard consumers from financial services, but that does not just contain creating brand new legislation. In fact, a bunch of financial service providers are dealing with suits for breaking laws associated with other companies.
The first Consumer Financial Protection Bureau targets have certainly been credit scar corporations. 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.
Another suit was just recently settled with American Express too, according to CBS. However, the lawsuit did not just contain the CFPB. There were also complains from the Federal Reserve, regulators in Utah State, the Federal Deposit Insurance Company, and the Office of the Comptroller of Currency.
Giving a ton to customers
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 laws for debt collection and reporting, not reporting billing disputes as mandated by law and making false claims about rewards.
The credit card company 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 fees based 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 consumers who were approved for an American Express "Blue Sky" card, which some customers never received.
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 customers 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.
In March 2013, about 250,000 people will get part of the $85 million concessions, according to NBC News.
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