The CFPB has gone on a bit of a tear with cases against credit card companies, 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 companies and agreeing to refund $85 million to consumers.
Many other card companies in court
The Consumer Financial Protection Bureau 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 making brand new regulations to shield customers.
Both Discover and Capital One have already faced suits from the CFPB amounting to over $200 million in settlements. A ton of that cash is going back to consumers according to NBC News. It seems credit card businesses have been the first targets.
Another lawsuit was just recently settled with American Express too, according to CBS. However, the lawsuit did not just include the CFPB. There were also complains from the Federal Reserve, regulators in Utah State, the Federal Deposit Insurance Company, and the Office of the Comptroller of Currency.
Returned to consumers
American Express is in trouble for breaking multiple regulations, including failing to report billing disputes and regulations about debt collection and reporting. It also charged late fees over legal limits and made false claims about rewards. Also, applicants over the age of 35 were discriminated against.
American Express decided to refund $85 million to customers 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 charges, 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 customers did not obtain that ever.
Age was a huge factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is recognized as discrimination.
Looking at debt practices
At American Express and its subsidiaries, there were lies being told from 2003 until now, according to CBS. The lie was that consumers could increase their credit scores if they paid off debts older than 7 years. These debts do not even show up on a credit score after that time period.
In March 2013, about 250,000 people will get part of the $85 million concessions, according to NBC News.
Many other card companies in court
The Consumer Financial Protection Bureau 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 making brand new regulations to shield customers.
Both Discover and Capital One have already faced suits from the CFPB amounting to over $200 million in settlements. A ton of that cash is going back to consumers according to NBC News. It seems credit card businesses have been the first targets.
Another lawsuit was just recently settled with American Express too, according to CBS. However, the lawsuit did not just include the CFPB. There were also complains from the Federal Reserve, regulators in Utah State, the Federal Deposit Insurance Company, and the Office of the Comptroller of Currency.
Returned to consumers
American Express is in trouble for breaking multiple regulations, including failing to report billing disputes and regulations about debt collection and reporting. It also charged late fees over legal limits and made false claims about rewards. Also, applicants over the age of 35 were discriminated against.
American Express decided to refund $85 million to customers 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 charges, 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 customers did not obtain that ever.
Age was a huge factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is recognized as discrimination.
Looking at debt practices
At American Express and its subsidiaries, there were lies being told from 2003 until now, according to CBS. The lie was that consumers could increase their credit scores if they paid off debts older than 7 years. These debts do not even show up on a credit score after that time period.
In March 2013, about 250,000 people will get part of the $85 million concessions, according to NBC News.
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