The Consumer Financial Protection Bureau isn't really content to sit tight. The agency has passed brand new regulations and started waging suits against financial providers that run afoul of consumer protection laws, with charge card companies being the first in the firing line. After winning lawsuits against Discover and Capital One, American Express is the latest to settle with the CFPB, along with other organizations, and has consented to refund $85 million to customers.
Many other card companies in court
The primary goal of the Consumer Financial Protection Bureau is to defend consumers from financial services, but that does not just consist of producing brand new legislation. In fact, a variety of financial service providers are dealing with suits for breaking laws associated with other agencies.
The first Consumer Financial Protection Bureau targets have definitely been credit scar businesses. Over $200 million in settlements, mostly cash going to customers have been made in lawsuits with Discover and Capital One already, according to NBC News.
CBS explained that one suit against American Express was filed by Utah state regulators, the Federal reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Business and the Consumer Financial Protection Bureau. That lawsuit was recently settled.
Returned to consumers
In the suit, American Express is alleged to have broken a number of laws. The credit card company was accused of discriminating against applicants over 35 years of age, making false claims about credit card rewards, charging late fees over legal limits and failing to report billing disputes to credit reporting organizations, a violation of laws regarding debt collection and reporting.
American Express consented 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.
American Express Centurian Bank also instituted a credit scoring system depending on age, which is contrary to anti-discrimination laws.
Another issue with debt
American Express, American Express Bank and American Express Centurian Bank also told some customers that they could improve credit scores by paying off debts which were at least 7 years old, which do not impact credit ratings. 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.
Many other card companies in court
The primary goal of the Consumer Financial Protection Bureau is to defend consumers from financial services, but that does not just consist of producing brand new legislation. In fact, a variety of financial service providers are dealing with suits for breaking laws associated with other agencies.
The first Consumer Financial Protection Bureau targets have definitely been credit scar businesses. Over $200 million in settlements, mostly cash going to customers have been made in lawsuits with Discover and Capital One already, according to NBC News.
CBS explained that one suit against American Express was filed by Utah state regulators, the Federal reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Business and the Consumer Financial Protection Bureau. That lawsuit was recently settled.
Returned to consumers
In the suit, American Express is alleged to have broken a number of laws. The credit card company was accused of discriminating against applicants over 35 years of age, making false claims about credit card rewards, charging late fees over legal limits and failing to report billing disputes to credit reporting organizations, a violation of laws regarding debt collection and reporting.
American Express consented 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.
American Express Centurian Bank also instituted a credit scoring system depending on age, which is contrary to anti-discrimination laws.
Another issue with debt
American Express, American Express Bank and American Express Centurian Bank also told some customers that they could improve credit scores by paying off debts which were at least 7 years old, which do not impact credit ratings. 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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