News

American Express to refund $85 million to consumers

Richard Cordray

Three American Express subsidiaries were ordered by the CFPB to refund $85 million to consumers on Monday for alleged violations of consumer protection laws.

The violations, which the CFPB contends happened “at every stage,” included marketing practices and enrollments, as well as payments and debt collection, AdvisorOne.com reports.

“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,” Richard Cordray, the head of the CFPB, said, according to AdvisorOne.com. “Today’s orders require the American Express companies to fully refund about $85 million to consumers and it requires them to make specific changes in their business practices. The American Express companies will identify the harmed customers, notify them, and make sure they get back their money.”

In addition to repaying an estimated $85 million to approximately 250,000 consumers, the Amex subsidiaries agreed to end the alleged illegal practices, offer convenient repayment for consumers, inform consumers of debt collection rights, submit to an independent audit and pay a $27.5 million civil monetary penalty.

The FDIC uncovered the alleged illegal activities with the help of the Utah Department of Financial Institutions during a routine examination of the American Express Centurion Bank.

Comments are closed.