Credit-card giant American Express (AmEx) on Tuesday announced a US$75.7 million settlement to resolve charges that it overbilled consumers and misled customers on services provided.
AmEx, a Dow component, is to pay US$16.2 million in fines and at least US$59.5 million in customer remediation, the company said.
The customer remediation is to go to more than 335,000 customers, the US Consumer Financial Protection Bureau (CFPB) said in a statement.
The action also involved the US Federal Deposit Insurance Corp (FDIC) and the US Office of the Comptroller of the Currency (OCC).
“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,” CFPB Director Richard Cordray said. “Consumers deserve to be treated fairly and should not pay for services they do not receive.”
The settlement resolves a variety of allegations over AmEx’s management of various supplementary products to customers, such as “identity protection.”
In some cases, AmEx charged consumers for identity protection services without the written authorization necessary to provide services, the CFPB said.
In other cases, consumers were misled about the benefits of an “account protector” program intended to offer relief after a major life event, such as unemployment or temporary disability.
AmEx said most of the costs associated with the settlements were already accounted for in previous quarters and that most of the remediation to customers has already been paid.
“American Express has cooperated fully with the CFPB, FDIC and OCC,” the company said in the statement, adding that it “continues to conduct internal reviews designed to identify issues, correct them and ensure that its products and practices meet a high standard of quality.”
Regulators had penalized the company last year for other violations related to credit-card add-on products in a deal that totaled US$112.5 million.
In that settlement, the firm was accused of deceiving customers who signed up for certain cards, leading them to believe they would receive benefits they did not.
American Express shares rose to a record US$88.69 on Tuesday.
The shares have climbed 54 percent this year, the second-best performance in the Dow Jones Industrial Average.
In October, AmEx announced its third-quarter profits rose 9.3 percent to US$1.37 billion.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS