The Consumer Financial Protection Bureau (CFPB) has ordered three American Express subsidiaries to refund $85 million to consumers over what it says were violations of consumer protection laws “at every stage” that ranged from marketing practices to enrollment, payment and debt collection.
The agency made the announcement Monday. Agency Director Richard Cordray said of the action in a statement, “Several American Express companies violated consumer protection laws and those laws were violated 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.”
He continued, “Today’s orders require the American Express companies to fully refund about $85 million to consumers and it requires them to make specific changes in their business practices. The American Express companies will identify the harmed customers, notify them, and make sure they get back their money.”
The Amex subsidiaries have agreed to end the illegal practices; repay an estimated $85 million to approximately 250,000 consumers; offer convenient repayment for consumers; inform consumers of their debt collection rights; submit to an independent audit; and in addition to the repayment, pay a civil monetary penalty of $27.5 million.
The enforcement action was taken jointly with three federal bank regulators: the Federal Deposit Insurance Corp. (FDIC), the Federal Reserve, and the Office of the Comptroller of the Currency, as well as with the Utah Department of Financial Institutions.