American Express to Refund $85 Million

[alp227]

Source: NYT

American Express will reimburse $85 million to about 250,000 customers to resolve accusations that the company violated federal law in its marketing, billing and debt collection practices, the company and the government said Monday.

The settlement is the latest in a series of enforcement actions that federal and state regulators have brought against some of the nation’s largest financial institutions for problems in their credit card businesses.

The multiagency investigation of American Express included the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Utah Department of Financial Institutions. They discovered problems in three American Express subsidiaries between 2003 and 2012 that ranged from the way the company advertised its cards to how it pursued customers behind on their bills.

The violations of consumer protection laws started “from the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt,” Richard Cordray, the director of the consumer protection bureau, said in a statement.

Read more: http://www.nytimes.com/2012/10/02/business/american-express-to-refund-85-million.html

[winstars]

1. Pugs: Repeal Dodd-Frank!!! Yeah, this CFPB is really a bad idea... NOT!!! n/t

[Laurian]

2. That new agency is more productive than Congress!

Kudos to Elizabeth Warren for her work to establish it.

[davidwparker]

3. +1

[antigop]

4. Thank you, Elizabeth Warren! n/t

[OnyxCollie]

5. They're paying fines

when they should be doing jail time.

Monday’s enforcement action was “intended as a message to all entities,” said Kent Markus, assistant director of enforcement for the consumer bureau. “There are consequences for violating the law.”

Yeah, the consequences are that the government takes a cut of the profits.

[Laurian]

6. Before the consumer bureau was established, they faced no consequences at all.

I am hopeful that this new agency will be a ferocious watchdog and prompt change through massive financial penalties, criminal charges or new regulations. It's a start.....a good start.

[OnyxCollie]

8. Without criminal charges and jail time,

it's simply the cost of doing business.

[Laurian]

9. Agreed, and they'll probably pass that cost on to consumers unless the bureau monitors for that.

I still think having the bureau is important and a step toward tighter regulation of companies ripping off hard working folks who are not savvy to all their crooked ways.

[GulleyJimson]

7. Where's my five bucks?