The CFPB isn't happy to sit tight. The bureau has passed brand new regulations and started waging lawsuits against financial service providers that run afoul of consumer protection regulations, with credit card businesses being the very first in the firing line. After winning lawsuits against Discover and Capital One, American Express is the latest to settle with the Consumer Financial Protection Bureau, along with other organizations, and has agreed to refund $85 million to customers.
American Express joins ranks of card companies slapped with CFPB lawsuits
The Consumer Financial Protection Bureau is not wasting much time getting stuck in and performing the task that it was created to do. Apart from making brand new regulations to better shield consumers and proposing reforms, it has also begun lodging suits against financial service providers that have fallen afoul of regulations, in conjunction with other federal agencies.
Both Discover and Capital One have already faced lawsuits from the Consumer Financial Protection Bureau amounting to over $200 million in settlements. A ton of that cash is going back to consumers according to NBC News. It seems credit card companies have been the first targets.
CBS explained that one lawsuit against American Express was filed by Utah state regulators, the Federal reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Business and the Consumer Financial Protection Bureau. That suit was recently settled.
$85 million returning to consumers
In the lawsuit, American Express is alleged to have broken a number of regulations. The credit card business was accused of discriminating against applicants over 35 years of age, making false claims about charge card rewards, charging late charges over legal limits and failing to report billing disputes to credit reporting companies, a violation of regulations regarding debt collection and reporting.
American Express agreed to refund $85 million to consumers and pay $27.5 million in fines.
The brouhaha over late charges, according to CBS, was due to charging late charges depending on a percentage but, according to CNN, subsidiaries American Express Centurian Bank and American Express Bank set the rate in excess of already established limits. American Express Centurian Bank also offered $300 to qualified customers who were approved for an American Express "Blue Sky" card, which some consumers never received.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was based on age.
Debt practices an issue
Some consumers were guaranteed that they would have an increased credit score if they paid off debts older than 7 years, which do not affect credit ratings at all. CBS explained that his has occurred since 2003 and still occurred this year. The lies were being told at American Express, American Express Bank and American Express Centurian bank.
According to NBC News, 250,000 people will get part of the $85 million in refunds. This will take place in March 2013.
American Express joins ranks of card companies slapped with CFPB lawsuits
The Consumer Financial Protection Bureau is not wasting much time getting stuck in and performing the task that it was created to do. Apart from making brand new regulations to better shield consumers and proposing reforms, it has also begun lodging suits against financial service providers that have fallen afoul of regulations, in conjunction with other federal agencies.
Both Discover and Capital One have already faced lawsuits from the Consumer Financial Protection Bureau amounting to over $200 million in settlements. A ton of that cash is going back to consumers according to NBC News. It seems credit card companies have been the first targets.
CBS explained that one lawsuit against American Express was filed by Utah state regulators, the Federal reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Business and the Consumer Financial Protection Bureau. That suit was recently settled.
$85 million returning to consumers
In the lawsuit, American Express is alleged to have broken a number of regulations. The credit card business was accused of discriminating against applicants over 35 years of age, making false claims about charge card rewards, charging late charges over legal limits and failing to report billing disputes to credit reporting companies, a violation of regulations regarding debt collection and reporting.
American Express agreed to refund $85 million to consumers and pay $27.5 million in fines.
The brouhaha over late charges, according to CBS, was due to charging late charges depending on a percentage but, according to CNN, subsidiaries American Express Centurian Bank and American Express Bank set the rate in excess of already established limits. American Express Centurian Bank also offered $300 to qualified customers who were approved for an American Express "Blue Sky" card, which some consumers never received.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was based on age.
Debt practices an issue
Some consumers were guaranteed that they would have an increased credit score if they paid off debts older than 7 years, which do not affect credit ratings at all. CBS explained that his has occurred since 2003 and still occurred this year. The lies were being told at American Express, American Express Bank and American Express Centurian bank.
According to NBC News, 250,000 people will get part of the $85 million in refunds. This will take place in March 2013.
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