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Real Estate News Releases
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(EstateNewsWire.com, October 06, 2012 ) San Francisco, CA - Federal and state regulators have forced American Express to pay back $85 million to 250,000 customers they were found to have deceived. The company has also been fined $27.5 million for multiple violations of consumer protection laws.
Among several regulators, the Consumer Financial Protection Bureau found that the company misled customers into believing they would receive a payment of $300, charged improper late payment fees and was involved in deceiving them about the importance of paying off old debts.
The CFPB’s Richard Cordray said, American Express, and its subsidiaries American Express, Centurion Bank, American Express Travel Related Services Co., and American Express Bank were complicit "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".
This was the third such action against a major credit card company, following recent prosecutions of Discover Financial Services and Capital One. Discover were charged with refunding $200 million and fined $14 million for add-on product violations, whilst Capital One had to reimburse their customers $150 million and pay $60 million, having been found guilty of deceptive marketing practices.
American Express agreed to cease its illegal behavior, and return each customers money by March 15, with existing account holders receiving a credit, and former ones a check. 50% of it will go those who were inappropriately billed for late payments on a percentage of their debt on cards with American Express Centurion Bank and American Express Bank, which is against the law. Another 30% will go to consumers misled about debt collection.
Certain customers were told that their debts would be handed on to debt collection companies, which the bank never did. Others were encouraged to accept settlements, the debts for which they would then be forgiven. All debts will be reimbursed with interest, and anyone denied a credit card due to outstanding debt will be automatically approved for that card, along with $100 compensation.
During proceedings, the company did not admit or deny violations, but later released an official statement saying, "The company is strengthening its internal compliance processes and will continue to work closely with its regulators."
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Source: EmailWire.Com 
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