Credit/Debit Cards, Regulation

AmEx, subsidiaries to pay $76 million in settlement over credit card add-on products

american expressAmerican Express announced last week that some of the company and several of its subsidiaries will pay approximately $76 million to settle claims with regulators over allegedly illegal credit card practices.

The company will pay nearly $60 million in customer remediation and just over $16 million in fines. AmEx said most of the costs have already been provided for in previous quarters, and most of the remediation has already been provided to credit card customers.

Regulators allege that three AmEx subsidiaries and vendors, as well as telemarketers, engaged in misleading and deceptive tactics to sell products like Identity Protect, Account Protector and Lost Wallet Protector.

Additionally, regulators allege that the company charged customers monthly fees that caused them to exceed their credit limits, leading to additional fees.

Under the terms of the settlement, AmEx and its subsidiaries, including Travel Related Services Co., Centurion Bank and AmEx Bank, must cease selling the products and stop billing consumers for products if they are not receiving the intended benefits.

AmEx said the company discontinued marketing of the products more than a year ago.

Comments are closed.