In the latest of a series of year-end enforcement actions, the Consumer Financial Protection Bureau has fined American Express nearly $60 million for illegal credit card practices.
The company is being ordered to pay an additional $16.2 million that includes $9.6 million in civil penalties.
Of late, the CFPB has taken action against mortgage lenders, auto lenders and other credit card providers including CapitalOne Bank for deceptive practices and discriminatory lending.
“We first warned companies last year about using deceptive marketing to sell credit card add-on products, and everyone should be on notice of this issue,” said CFPB Director Richard Cordray. “Today we are refunding thousands of American Express customers who were harmed by these illegal practices. Consumers deserve to be treated fairly and should not pay for services they do not receive.”
According to the Bureau, three American Express subsidiaries and their vendors and telemarketers used deceptive practices to sell add-on products to credit card customers between 2000 and 2012.
Under the CFPB’s enforcement action, American Express has been ordered to refund $59.5 million to more than 335,000 customers who were subject to the unfair practices.
The agency coordinated its work with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency to address the issues. The FDIC and OCC are fining American Express subsidiaries an additional $3.6 million and $3 million, respectively.
Written by Elizabeth Ecker