The Consumer Financial Protection Bureau isn't really content to sit tight. The bureau has passed new regulations and begun waging suits against financial service providers that run afoul of consumer protection regulations, with credit card companies being the 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 consented to refund $85 million to customers.
Many other card businesses in court
The primary goal of the CFPB is to defend consumers from financial services, but that does not just include making brand new legislation. In fact, a lot of financial service providers are dealing with lawsuits for breaking laws associated with other companies.
The first CFPB targets have surely been credit scar companies. Over $200 million in settlements, mostly cash going to customers have been made in suits with Discover and Capital One already, according to NBC News.
CBS explained that one suit against American Express was filed by Utah state regulators, the Federal reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Company and the Consumer Financial Protection Bureau. That lawsuit was recently settled.
Giving a ton to consumers
There were a ton of laws broken by American Express, such as discrimination of those over the age of 35, charging late charges over legal limits, violating laws for debt collection and reporting, not reporting billing disputes as mandated by law and making false claims about rewards.
The credit card company is ordered to pay $27.5 million in fines and $85 million back to consumers in a refund.
The brouhaha over late fees, according to CBS, was due to charging late fees 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 customers 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 happened 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 occur in March 2013.
Many other card businesses in court
The primary goal of the CFPB is to defend consumers from financial services, but that does not just include making brand new legislation. In fact, a lot of financial service providers are dealing with lawsuits for breaking laws associated with other companies.
The first CFPB targets have surely been credit scar companies. Over $200 million in settlements, mostly cash going to customers have been made in suits with Discover and Capital One already, according to NBC News.
CBS explained that one suit against American Express was filed by Utah state regulators, the Federal reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Company and the Consumer Financial Protection Bureau. That lawsuit was recently settled.
Giving a ton to consumers
There were a ton of laws broken by American Express, such as discrimination of those over the age of 35, charging late charges over legal limits, violating laws for debt collection and reporting, not reporting billing disputes as mandated by law and making false claims about rewards.
The credit card company is ordered to pay $27.5 million in fines and $85 million back to consumers in a refund.
The brouhaha over late fees, according to CBS, was due to charging late fees 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 customers 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 happened 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 occur in March 2013.
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