Breaking News, World News and Taiwan News.

AmEx pays US$112 mil. over late-fees, deception

WASHINGTON--American Express is paying US$112 million in refunds and fines to settle regulators' accusations that it charged unlawful late fees and deceived customers to pressure them to pay off old debts or buy extra credit card services.

The company agreed to the settlements announced Monday by four federal agencies, including the Federal Reserve and the Consumer Financial Protection Bureau, and Utah regulators.

American Express is refunding US$85 million to about 250,000 customers and is paying US$27.5 million in civil fines.

The agencies said American Express violated federal laws prohibiting deceptive practices by using false statements to get customers to settle old debts. The regulators say that included falsely telling customers that if they agreed to settlements to partially pay off their debts, the remaining balance would be forgiven.

The violations were said to have occurred from 2003 to this past spring.

The director of the Consumer Financial Protection Bureau, Richard Cordray, said in a statement that the company violated consumer-protection laws “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.”

American Express also charged late fees on some credit cards based on a percentage of the debt owed, a violation of a 2009 law prohibiting certain credit card practices, the regulators said.

They said customers were sometimes led to believe they would get US$300 as well as bonus points if they signed up for Amex's “Blue Sky” credit card program. Customers who met the conditions didn't receive the promised US$300, according to the agencies.

In addition, they said the company:

— Unlawfully discriminated against consumers applying for new card accounts on the basis of age.

— Failed to report customer disputes over billing to the consumer-credit reporting agencies.

New York-based American Express also agreed to end the practices and to hire independent auditors to ensure the company's compliance with consumer-protection laws.

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive China Post promos
 Respond to this email
 Yahoo CEO Mayer adds motherhood to list of challenges 
In this Tuesday, Jan. 17 file photo, an American Express card is shown in Surfside, Florida. American Express is paying US$112.5 million in refunds and fines to settle regulators' accusations that it charged illegal late fees and deceived customers to pressure them to pay off old debts or buy extra credit card services. (AP)

Enlarge Photo
WSJA
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   Terms of Use  |   Sitemap
  chinapost search