AmEx Refunds $60 Million to Customers for Illegal Credit Card Practices
December 31, 2013Unfair billing tactics and deceptive marketing was ruled against American Express by the CFPB, a federal agency which monitors how financial products and services work for consumers. American Express was ordered to refund a total of $60 million which was collected from more than 335,000 customers for illegal credit card practices, according to the company and the Consumer Financial Protection Bureau.
American Express said it started paying the remediation to customers earlier this year. The company wouldn’t say exactly how much it has paid back so far. But the illegal practices included marketing and charging for identity protection products, which American Express didn’t provide to customers since they needed written consent from card holders.
The CFBP said that 85 percent of customers who enrolled in these services paid the full fee without receiving all of the advertised benefits.
Customers also paid interest charges on fees for services that were never received. In addition, the agency said that American Express charged unfair monthly fees that resulted in a card holder exceeding his or her credit card limit, which led to customers paying additional fees.
On top of the customer refunds, American Express will also pay an additional $9.6 million in civil penalties to the CFPB. The credit card company will pay another $3.6 million to the Federal Deposit Insurance Corporation and $3 million to the Office of the Comptroller of the Currency, who helped coordinate the action.
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Original article courtesy of www.sentinelsource.com.
