Daily News: October 2, 2012

AMEX to Pay $112MM to Settle Deceptive Practices Case


According to the Consumer Financial Protection Bureau, American Express has agreed to pay $112 million in refunds and fines to settle regulators’ accusations that it charged unlawful late fees and deceived customers to pressure them to pay off old debts or buy extra credit card services.

According to the news release, AMEX is refunding $85 million to about 250,000 customers and is paying $27.5 million in civil fines.

The agency said AMEX violated federal laws prohibiting deceptive practices by using false statements to get customers to settle old debts. The regulators say that included falsely telling customers that if they agreed to settlements to partially pay off their debts, the remaining balance would be forgiven.

The violations were said to have occurred from 2003 to this past spring.
The director of the Consumer Financial Protection Bureau, Richard Cordray, said in a statement that the company violated consumer-protection laws “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.”

To read the Consumer Financial Protection Bureau news release, click here.