The Consumer Financial Protection Bureau has gone on a bit of a tear with suits against credit card corporations, nailing Discover and Capital One a few months ago. American Express has joined the ranks, settling a suit with the Consumer Financial Protection Bureau and other agencies and agreeing to return $85 million to consumers.
Card corporations dealing with Consumer Financial Protection Bureau
The CFPB has already started a variety of suits against financial service providers that have been breaking laws set by other companies. The bureau is not just creating new regulations to protect customers.
The first Consumer Financial Protection Bureau targets have certainly been credit scar corporations. 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.
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 lawsuit was recently settled.
Giving a ton 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 credit card rewards, charging late charges over legal limits and failing to report billing disputes to credit reporting companies, a violation of laws concerning debt collection and reporting.
American Express consented 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. Rather than charging one fee, they charge a percentage, according to CBS. Also, $300 bonuses were offered to consumers who got the American Express "Blue Sky" car, but consumers did not obtain that ever.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was depending on age.
Debt practices an issue
Some customers were guaranteed that they would have an increased credit score if they paid off debts older than 7 years, which do not impact credit ratings at all. CBS explained that his has occurred since 2003 and still happened this year. The lies were being told at American Express, American Express Bank and American Express Centurian bank.
In March 2013, about 250,000 people will get part of the $85 million refunds, according to NBC News.
Card corporations dealing with Consumer Financial Protection Bureau
The CFPB has already started a variety of suits against financial service providers that have been breaking laws set by other companies. The bureau is not just creating new regulations to protect customers.
The first Consumer Financial Protection Bureau targets have certainly been credit scar corporations. 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.
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 lawsuit was recently settled.
Giving a ton 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 credit card rewards, charging late charges over legal limits and failing to report billing disputes to credit reporting companies, a violation of laws concerning debt collection and reporting.
American Express consented 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. Rather than charging one fee, they charge a percentage, according to CBS. Also, $300 bonuses were offered to consumers who got the American Express "Blue Sky" car, but consumers did not obtain that ever.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was depending on age.
Debt practices an issue
Some customers were guaranteed that they would have an increased credit score if they paid off debts older than 7 years, which do not impact credit ratings at all. CBS explained that his has occurred since 2003 and still happened this year. The lies were being told at American Express, American Express Bank and American Express Centurian bank.
In March 2013, about 250,000 people will get part of the $85 million refunds, according to NBC News.
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