American Express has agreed to refund $85 million to consumers and pay $27.5 million in fines to the CFPB and many other government companies. The company was sued for wrongdoing that ran afoul of consumer financial laws and is the 3rd charge card business to be sued by the fledgling CFPB.
Consumer Financial Protection Bureau not happy with charge card corporations
The CFPB isn't wasting much time getting stuck in and performing the task that it was produced to do. Aside from making new regulations to better defend consumers and proposing reforms, it has also begun lodging suits against financial service providers that have fallen afoul of laws, in conjunction with other federal agencies.
The first Consumer Financial Protection Bureau targets have surely been credit scar corporations. Over $200 million in settlements, mostly cash going to customers have been made in lawsuits with Discover and Capital One already, according to NBC News.
CBS explained that one lawsuit 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.
Customers get quick cash
There were a lot of laws broken by American Express, including discrimination of those over the age of 35, charging late charges over legal limits, violating regulations 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 consumers in a refund.
One problem 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 a huge factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is considered discrimination.
Another issue with debt
American Express, American Express Bank and American Express Centurian Bank also told some consumers that they could improve credit ratings 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.
There are about 250,000 people who will receive part of the $85 million allotted to concessions. They should, according to NBC News, obtain it in March 2013.
Consumer Financial Protection Bureau not happy with charge card corporations
The CFPB isn't wasting much time getting stuck in and performing the task that it was produced to do. Aside from making new regulations to better defend consumers and proposing reforms, it has also begun lodging suits against financial service providers that have fallen afoul of laws, in conjunction with other federal agencies.
The first Consumer Financial Protection Bureau targets have surely been credit scar corporations. Over $200 million in settlements, mostly cash going to customers have been made in lawsuits with Discover and Capital One already, according to NBC News.
CBS explained that one lawsuit 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.
Customers get quick cash
There were a lot of laws broken by American Express, including discrimination of those over the age of 35, charging late charges over legal limits, violating regulations 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 consumers in a refund.
One problem 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 a huge factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is considered discrimination.
Another issue with debt
American Express, American Express Bank and American Express Centurian Bank also told some consumers that they could improve credit ratings 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.
There are about 250,000 people who will receive part of the $85 million allotted to concessions. They should, according to NBC News, obtain it in March 2013.
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