The Consumer Financial Protection Bureau isn't content to sit tight. The agency has passed new regulations and begun waging suits against financial service providers that run afoul of consumer protection laws, with credit card companies being the very first in the firing line. After winning lawsuits against Discover and Capital One, American Express is the most recent to settle with the Consumer Financial Protection Bureau, along with other agencies, and has consented to refund $85 million to customers.
American Express joins ranks of card corporations slapped with Consumer Financial Protection Bureau suits
The Consumer Financial Protection Bureau isn't really wasting much time getting stuck in and performing the task that it was created to do. Aside from producing brand new regulations to better protect customers and proposing reforms, it has also begun lodging suits against financial service providers that have fallen afoul of regulations, in conjunction with other federal organizations.
Credit card businesses have thus far been first in the firing line. Lawsuits involving the CFPB have been brought against Discover and Capital One, according to NBC News, both resulting in settlements in excess of $200 million, much of going to refunding customers.
American Express has just settled a comparable suit, brought by the CFPB, 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.
Returned to customers
In the lawsuit, American Express is alleged to have broken a number of regulations. The credit card business 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 organizations, a violation of regulations regarding debt collection and reporting.
American Express agreed to refund $85 million to consumers and pay $27.5 million in fines.
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 customers who got the American Express "Blue Sky" car, but consumers did not receive that ever.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was depending on age.
Looking at debt procedures
American Express, American Express Bank and American Express Centurian Bank also told some consumers that they could improve credit scores by paying off debts which were at least 7 years old, which do not affect credit scores. 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 happen in March 2013.
American Express joins ranks of card corporations slapped with Consumer Financial Protection Bureau suits
The Consumer Financial Protection Bureau isn't really wasting much time getting stuck in and performing the task that it was created to do. Aside from producing brand new regulations to better protect customers and proposing reforms, it has also begun lodging suits against financial service providers that have fallen afoul of regulations, in conjunction with other federal organizations.
Credit card businesses have thus far been first in the firing line. Lawsuits involving the CFPB have been brought against Discover and Capital One, according to NBC News, both resulting in settlements in excess of $200 million, much of going to refunding customers.
American Express has just settled a comparable suit, brought by the CFPB, 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.
Returned to customers
In the lawsuit, American Express is alleged to have broken a number of regulations. The credit card business 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 organizations, a violation of regulations regarding debt collection and reporting.
American Express agreed to refund $85 million to consumers and pay $27.5 million in fines.
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 customers who got the American Express "Blue Sky" car, but consumers did not receive that ever.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was depending on age.
Looking at debt procedures
American Express, American Express Bank and American Express Centurian Bank also told some consumers that they could improve credit scores by paying off debts which were at least 7 years old, which do not affect credit scores. 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 happen in March 2013.
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