American Express has consented to refund $85 million to customers and pay $27.5 million in fines to the CFPB and numerous other government agencies. The company was sued for wrongdoing that ran afoul of consumer financial laws and is the third credit card business to be sued by the fledgling CFPB.
CFPB suits annoy American Express
The CFPB isn't wasting much time getting stuck in and performing the job that it was created to do. Apart from producing new regulations to better protect consumers and proposing reforms, it has also started lodging suits against financial service providers that have fallen afoul of laws, in conjunction with other federal organizations.
The first CFPB targets have definitely been credit scar companies. Over $200 million in settlements, mostly cash going to consumers have been made in suits with Discover and Capital One already, according to NBC News.
Another lawsuit was just recently settled with American Express too, according to CBS. However, the suit did not just consist of the Consumer Financial Protection Bureau. 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.
Returned to customers
There were a ton of regulations broken by American Express, including discrimination of those over the age of 35, charging late charges 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 charge card company is ordered to pay $27.5 million in fines and $85 million back to customers in a refund.
Subsidiaries American Express Bank and American Express Centurian Bank were in trouble because they charged a rate higher than legal limits for late fees, according to CNN. Instead of 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.
American Express Centurian Bank also instituted a credit scoring system depending on age, which is contrary to anti-discrimination laws.
Old debt procedures also cited
At American Express and its subsidiaries, there were lies being told from 2003 until now, according to CBS. The lie was that consumers could increase their credit scores if they paid off debts older than 7 years. These debts do not even show up on a credit rating after that time period.
There are about 250,000 people who will obtain part of the $85 million allocated to refunds. They should, according to NBC News, get it in March 2013.
CFPB suits annoy American Express
The CFPB isn't wasting much time getting stuck in and performing the job that it was created to do. Apart from producing new regulations to better protect consumers and proposing reforms, it has also started lodging suits against financial service providers that have fallen afoul of laws, in conjunction with other federal organizations.
The first CFPB targets have definitely been credit scar companies. Over $200 million in settlements, mostly cash going to consumers have been made in suits with Discover and Capital One already, according to NBC News.
Another lawsuit was just recently settled with American Express too, according to CBS. However, the suit did not just consist of the Consumer Financial Protection Bureau. 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.
Returned to customers
There were a ton of regulations broken by American Express, including discrimination of those over the age of 35, charging late charges 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 charge card company is ordered to pay $27.5 million in fines and $85 million back to customers in a refund.
Subsidiaries American Express Bank and American Express Centurian Bank were in trouble because they charged a rate higher than legal limits for late fees, according to CNN. Instead of 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.
American Express Centurian Bank also instituted a credit scoring system depending on age, which is contrary to anti-discrimination laws.
Old debt procedures also cited
At American Express and its subsidiaries, there were lies being told from 2003 until now, according to CBS. The lie was that consumers could increase their credit scores if they paid off debts older than 7 years. These debts do not even show up on a credit rating after that time period.
There are about 250,000 people who will obtain part of the $85 million allocated to refunds. They should, according to NBC News, get it in March 2013.
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