American Express fined for illegal credit card practices
Three US regulators fined American Express and its three subsidiaries Tuesday for their illegal practices in selling credit card.business Updated: Dec 25, 2013 15:32 IST
Three US regulators fined American Express and its three subsidiaries Tuesday for their illegal practices in selling credit card.
The US regulators ordered them to refund $59.5 million to more than 335,000 consumers and pay a total of $16.2 million in civil penalties, reported Xinhua.
American express and its three subsidiaries, American Express Travel Related Services Company, American Express Centurion Bank and American Express Bank were accused of taking unfair billing tactics and deceptive marketing with respect to credit card add-on products such as payment protection and credit monitoring from 2000 to 2012, said the Consumer Financial Protection Bureau (CFPB).
"Today we are refunding thousands of American Express customers who were harmed by these illegal practices," said CFPB Director Richard Cordray.
"Consumers deserve to be treated fairly and should not pay for services they do not receive," he said.
For civil penalties, CFPB fined American Express and its subsidiaries $9.6 million, while the Federal Deposit Insurance Corporation (FDIC) fined American Express Centurion Bank $3.6 million. The Office of the Comptroller of the Currency (OCC) fined American Express Bank $3 million.
Marketing of the products included in the above settlements was discontinued more than a year ago, said American Express Tuesday in a statement, and added most of the penalties associated with the settlements have been paid in prior quarters, and most of the remediation has already been provided to customers.