American Express has decided to refund $85 million to customers and pay $27.5 million in fines to the Consumer Financial Protection Bureau and many other government organizations. The company was sued for wrongdoing that ran afoul of consumer financial laws and is the third credit card company to be sued by the fledgling Consumer Financial Protection Bureau.
Card corporations dealing with Consumer Financial Protection Bureau
The main goal of the CFPB is to guard customers from financial services, but that does not just include producing new legislation. In fact, a variety of financial service providers are dealing with suits for breaking laws associated with other organizations.
Both Discover and Capital One have already faced lawsuits from the CFPB amounting to over $200 million in settlements. A ton of that cash is going back to customers according to NBC News. It seems credit card companies have been the first targets.
American Express has just settled a comparable lawsuit, 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.
Customers get quick cash
In the lawsuit, American Express is alleged to have broken a number of regulations. The credit card company was accused of discriminating against applicants over 35 years of age, making false claims about charge card rewards, charging late fees 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 customers 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 businesses were charging late fees depending on a percentage too, according to CNN. The problem with that was that they were charging more than already established limits.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was depending on age.
Also issue of debt practices
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 score after that period of time.
There are about 250,000 people who will get part of the $85 million allotted to concessions. They should, according to NBC News, receive it in March 2013.
Card corporations dealing with Consumer Financial Protection Bureau
The main goal of the CFPB is to guard customers from financial services, but that does not just include producing new legislation. In fact, a variety of financial service providers are dealing with suits for breaking laws associated with other organizations.
Both Discover and Capital One have already faced lawsuits from the CFPB amounting to over $200 million in settlements. A ton of that cash is going back to customers according to NBC News. It seems credit card companies have been the first targets.
American Express has just settled a comparable lawsuit, 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.
Customers get quick cash
In the lawsuit, American Express is alleged to have broken a number of regulations. The credit card company was accused of discriminating against applicants over 35 years of age, making false claims about charge card rewards, charging late fees 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 customers 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 businesses were charging late fees depending on a percentage too, according to CNN. The problem with that was that they were charging more than already established limits.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was depending on age.
Also issue of debt practices
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 score after that period of time.
There are about 250,000 people who will get part of the $85 million allotted to concessions. They should, according to NBC News, receive it in March 2013.
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