Just because a company manages to ingratiate itself with the public through a number of funny or pleasant commercials doesn't necessarily mean it's fully trustworthy. Recent events make it look like all of the goodwill American Express has built up for itself may not be enough to make people forget the penalties it’s now being ordered to pay by the Consumer Financial Protection Bureau (CFPB).
Details Involved with the Recent American Express Penalties
American Express has been ordered “to refund 59.5 million to more than 335,000 consumers over what the CFPB called ‘illegal credit card practices’.” The company will also be required to pay a $9.6 million cash penalty directly to the CFPB.
One of the misleading options offered to consumers was the supposed promise that if they lost their jobs or became disabled, their minimum monthly payments would no longer be due. According to the CFPB, what was actually being offered was just a “benefit payment that was limited to 2.5% of the consumer’s outstanding balance, up to $500. In many cases, the amount that was canceled was less than the minimum payment due.”
Here are some of the other complaints the CFPB has investigated regarding American Express’ alleged financial improprieties.
- The way interest and other fees are charged to customer accounts. In some cases, customers were charged with questionable fees and interest that actually caused them to go over their credit limits, triggering additional fees;
- Irregularities in the way American Express charged customers for its identity-fraud protection program. The CFPB says that American Express “began charging customers fees for the service, sometimes for several years, even before it obtained the authorization necessary to actually began monitoring each customer's credit record;”
- In addition, in regards to the identity-fraud detection services, “About 85% of the customers enrolled were billed even though they did not get the benefit.” Still others were billed for multiple years, only receiving part of what they were promised.
Unfortunately, far too many credit card companies use highly questionable billing practices. For this reason, all of us should refrain from using credit cards whenever possible. At least we have the CFPB constantly monitoring companies that can no longer be trusted to do the right thing when they think no one is looking.
If you believe that you’re a victim of any abusive debt collection practices, contact the Law Offices of Georgia consumer protection attorney Shane Smith so that you can learn more about your rights under federal and state consumer protection statutes. Call (770) 487-8999 today to schedule your free initial consultation.