American Express Settles Suit For $85 Million In Refunds
| 04:53:00 |
American Express has agreed to refund $85 million to customers and pay $27.5 million in fines to the Consumer Financial Protection Bureau and several other government organizations. The business was sued for wrongdoing that ran afoul of consumer financial regulations and is the 3rd credit card business to be sued by the fledgling CFPB.
Card corporations dealing with Consumer Financial Protection Bureau
The main goal of the Consumer Financial Protection Bureau is to protect consumers from financial services, but that does not just consist of producing new legislation. In fact, a bunch of financial service providers are dealing with suits for breaking laws associated with other companies.
Both Discover and Capital One have already faced suits from the CFPB amounting to over $200 million in settlements. A lot of that cash is going back to consumers according to NBC News. It seems credit card businesses have been the first targets.
CBS explained that one suit against American Express was filed by Utah state regulators, the Federal reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Business and the Consumer Financial Protection Bureau. That suit was recently settled.
Consumers get quick cash
There were a lot of laws broken by American Express, such as 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 business is ordered to pay $27.5 million in fines and $85 million back to consumers in a refund.
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 corporations were charging late fees based on a percentage too, according to CNN. The problem with that was that they were charging more than already established limits.
Age was an enormous 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
At American Express and its subsidiaries, there were lies being told from 2003 until now, according to CBS. The lie was that customers could increase their credit ratings if they paid off debts older than 7 years. These debts do not even show up on a credit rating after that time period.
In March 2013, about 250,000 people will get part of the $85 million concessions, according to NBC News.
Card corporations dealing with Consumer Financial Protection Bureau
The main goal of the Consumer Financial Protection Bureau is to protect consumers from financial services, but that does not just consist of producing new legislation. In fact, a bunch of financial service providers are dealing with suits for breaking laws associated with other companies.
Both Discover and Capital One have already faced suits from the CFPB amounting to over $200 million in settlements. A lot of that cash is going back to consumers according to NBC News. It seems credit card businesses have been the first targets.
CBS explained that one suit against American Express was filed by Utah state regulators, the Federal reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Business and the Consumer Financial Protection Bureau. That suit was recently settled.
Consumers get quick cash
There were a lot of laws broken by American Express, such as 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 business is ordered to pay $27.5 million in fines and $85 million back to consumers in a refund.
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 corporations were charging late fees based on a percentage too, according to CNN. The problem with that was that they were charging more than already established limits.
Age was an enormous 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
At American Express and its subsidiaries, there were lies being told from 2003 until now, according to CBS. The lie was that customers could increase their credit ratings if they paid off debts older than 7 years. These debts do not even show up on a credit rating after that time period.
In March 2013, about 250,000 people will get part of the $85 million concessions, according to NBC News.
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