American Express has agreed to refund $85 million to consumers 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 regulations and is the 3rd charge card company to be sued by the fledgling Consumer Financial Protection Bureau.
Many other card corporations in the courtroom
The Consumer Financial Protection Bureau has already started a variety of suits against financial service providers that have been breaking regulations set by other agencies. The agency is not just producing new regulations to protect customers.
The first Consumer Financial Protection Bureau targets have surely been credit scar businesses. Over $200 million in settlements, mostly cash going to consumers have been made in lawsuits with Discover and Capital One already, according to NBC News.
American Express has just settled a comparable suit, 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 consumers
American Express is in trouble for breaking multiple laws, including failing to report billing disputes and laws about debt collection and reporting. It also charged late fees over legal limits and made false claims about rewards. Also, applicants over the age of 35 were discriminated against.
A refund will be essential for $85 million from American Express. The company will even 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. Instead of charging one fee, they charge a percentage, according to CBS. Also, $300 bonuses were offered to customers who got the American Express "Blue Sky" car, but customers did not obtain that ever.
American Express Centurian Bank also instituted a credit scoring system based on age, which is contrary to anti-discrimination laws.
Debt practices an issue
American Express, American Express Bank and American Express Centurian Bank also told some consumers that they could improve credit scores by paying down debts that were at least 7 years old, which do not affect credit ratings. These violations, according to CBS, are said to have been going on from 2003 to this year.
According to NBC News, 250,000 people will get part of the $85 million in refunds. This will take place in March 2013.
Many other card corporations in the courtroom
The Consumer Financial Protection Bureau has already started a variety of suits against financial service providers that have been breaking regulations set by other agencies. The agency is not just producing new regulations to protect customers.
The first Consumer Financial Protection Bureau targets have surely been credit scar businesses. Over $200 million in settlements, mostly cash going to consumers have been made in lawsuits with Discover and Capital One already, according to NBC News.
American Express has just settled a comparable suit, 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 consumers
American Express is in trouble for breaking multiple laws, including failing to report billing disputes and laws about debt collection and reporting. It also charged late fees over legal limits and made false claims about rewards. Also, applicants over the age of 35 were discriminated against.
A refund will be essential for $85 million from American Express. The company will even 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. Instead of charging one fee, they charge a percentage, according to CBS. Also, $300 bonuses were offered to customers who got the American Express "Blue Sky" car, but customers did not obtain that ever.
American Express Centurian Bank also instituted a credit scoring system based on age, which is contrary to anti-discrimination laws.
Debt practices an issue
American Express, American Express Bank and American Express Centurian Bank also told some consumers that they could improve credit scores by paying down debts that were at least 7 years old, which do not affect credit ratings. These violations, according to CBS, are said to have been going on from 2003 to this year.
According to NBC News, 250,000 people will get part of the $85 million in refunds. This will take place in March 2013.
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