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Amex to pay $113 million for ‘illegal’ practices in USOctober 2, 2012 American Express Co. and three of its units agreed to pay a fine of $27.5 million and refund roughly $85 million to about 250,000 customers for allegedly illegal card practices, according to a settlement announced Monday by bank regulators and the Consumer Financial Protection Bureau. “Several American Express companies violated consumer protection laws and those laws were violated at all stages of the game – from the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt,” said Richard Cordray, director of the consumer bureau, in a statement. Several regulators ordered American Express AXP +0.02% to pay fines, cumulatively totalling $27.5 million. The credit card company was ordered to pay $14.1 million by the consumer bureau, $3.9 million by the Federal Deposit Insurance Corp., $9 million by the Federal Reserve and $500,000 by the Office of the Comptroller of the Currency. The bureau said that an investigation launched by the Federal Deposit Insurance Corp. and a Utah regulator found that American Express  allegedly deceived consumers who signed up for American Express’s “Blue Sky” credit card program. The regulators said that consumers were sometimes led to believe they would receive $300 in addition to bonus points if they signed up for the program but they didn’t get the money. It also found that the firm allegedly failed to report consumer disputes to consumer reporting agencies and purportedly unlawfully discriminated against new account applicants on the basis of their age. The consumer bureau also said the American Express units allegedly wrongly told consumers that if they paid off old credit card debt the payment would be reported to credit bureaus and it could improve their credit scores. According to a statement from the regulators, American Express did not report the payments. In many cases, the Consumer Financial Protection Bureau said, the debts were so old that reporting them would not have affected consumer credit scores.  Source

Amex to pay $113 million for ‘illegal’ practices in US
October 2, 2012

American Express Co. and three of its units agreed to pay a fine of $27.5 million and refund roughly $85 million to about 250,000 customers for allegedly illegal card practices, according to a settlement announced Monday by bank regulators and the Consumer Financial Protection Bureau.

“Several American Express companies violated consumer protection laws and those laws were violated at all stages of the game – from the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt,” said Richard Cordray, director of the consumer bureau, in a statement.

Several regulators ordered American Express AXP +0.02% to pay fines, cumulatively totalling $27.5 million. The credit card company was ordered to pay $14.1 million by the consumer bureau, $3.9 million by the Federal Deposit Insurance Corp., $9 million by the Federal Reserve and $500,000 by the Office of the Comptroller of the Currency.

The bureau said that an investigation launched by the Federal Deposit Insurance Corp. and a Utah regulator found that American Express  allegedly deceived consumers who signed up for American Express’s “Blue Sky” credit card program. The regulators said that consumers were sometimes led to believe they would receive $300 in addition to bonus points if they signed up for the program but they didn’t get the money.

It also found that the firm allegedly failed to report consumer disputes to consumer reporting agencies and purportedly unlawfully discriminated against new account applicants on the basis of their age.

The consumer bureau also said the American Express units allegedly wrongly told consumers that if they paid off old credit card debt the payment would be reported to credit bureaus and it could improve their credit scores. According to a statement from the regulators, American Express did not report the payments. In many cases, the Consumer Financial Protection Bureau said, the debts were so old that reporting them would not have affected consumer credit scores. 

Source

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