The CFPB has gone on a bit of a tear with lawsuits against charge card companies, nailing Discover and Capital One a few months ago. American Express has joined the ranks, settling a case with the CFPB and other organizations and agreeing to return $85 million to consumers.
CFPB suits annoy American Express
The Consumer Financial Protection Bureau has already started a lot of suits against financial service providers that have been breaking regulations set by other organizations. The agency is not just creating new regulations to protect consumers.
Credit card companies have thus far been first in the firing line. Suits involving the CFPB have been brought against Discover and Capital One, according to NBC News, both resulting in settlements in excess of $200 million, much of going to refunding customers.
American Express has just settled a similar suit, brought by the CFPB, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Business, the Federal Reserve, and, according to CBS, regulators from the state of Utah.
Consumers get quick cash
In the suit, American Express is alleged to have broken a number of laws. The charge card business was accused of discriminating against applicants over 35 years of age, making false claims about credit card rewards, charging late charges over legal limits and failing to report billing disputes to credit reporting organizations, a violation of regulations regarding debt collection and reporting.
The charge card company is ordered to pay $27.5 million in fines and $85 million back to consumers in a refund.
One problem was with subsidiary American Express Centurian Bank who never gave customers the $300 reward promised for signing up for an American Express "Blue Sky" cad. CBS explained that the corporations were charging late charges depending on a percentage too, according to CNN. The issue with that was that they were charging more than already established limits.
Age was a massive factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is considered discrimination.
Looking at debt procedures
American Express, American Express Bank and American Express Centurian Bank also told some consumers that they could improve credit ratings by paying down debts which were at least 7 years old, which do not affect credit scores. These violations, according to CBS, are said to have been going on from 2003 to this year.
In March 2013, about 250,000 people will get part of the $85 million refunds, according to NBC News.
CFPB suits annoy American Express
The Consumer Financial Protection Bureau has already started a lot of suits against financial service providers that have been breaking regulations set by other organizations. The agency is not just creating new regulations to protect consumers.
Credit card companies have thus far been first in the firing line. Suits involving the CFPB have been brought against Discover and Capital One, according to NBC News, both resulting in settlements in excess of $200 million, much of going to refunding customers.
American Express has just settled a similar suit, brought by the CFPB, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Business, the Federal Reserve, and, according to CBS, regulators from the state of Utah.
Consumers get quick cash
In the suit, American Express is alleged to have broken a number of laws. The charge card business was accused of discriminating against applicants over 35 years of age, making false claims about credit card rewards, charging late charges over legal limits and failing to report billing disputes to credit reporting organizations, a violation of regulations regarding debt collection and reporting.
The charge card company is ordered to pay $27.5 million in fines and $85 million back to consumers in a refund.
One problem was with subsidiary American Express Centurian Bank who never gave customers the $300 reward promised for signing up for an American Express "Blue Sky" cad. CBS explained that the corporations were charging late charges depending on a percentage too, according to CNN. The issue with that was that they were charging more than already established limits.
Age was a massive factor in the credit scoring system at American Express Centurian Bank. That is not legal because it is considered discrimination.
Looking at debt procedures
American Express, American Express Bank and American Express Centurian Bank also told some consumers that they could improve credit ratings by paying down debts which were at least 7 years old, which do not affect credit scores. These violations, according to CBS, are said to have been going on from 2003 to this year.
In March 2013, about 250,000 people will get part of the $85 million refunds, according to NBC News.
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