The Consumer Financial Protection Bureau isn't really content to sit tight. The bureau has passed new regulations and started waging lawsuits against financial service providers that run afoul of consumer protection laws, with charge card businesses 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 agreed to refund $85 million to customers.
Many other card corporations in the courtroom
The CFPB isn't wasting much time getting stuck in and performing the job that it was produced to do. Apart from making brand new regulations to better guard customers and proposing reforms, it has also started lodging lawsuits against financial service providers that have fallen afoul of laws, in conjunction with other federal organizations.
Charge card companies have thus far been first in the firing line. Suits involving the CFPB have been brought against Discover and Capital One, according to NBC News, both resulting in settlements in excess of $200 million, much of going to refunding consumers.
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 CFPB. That lawsuit was recently settled.
$85 million returning to consumers
In the lawsuit, American Express is alleged to have broken numerous regulations. The charge card business was accused of discriminating against applicants over 35 years of age, making false claims about charge card rewards, charging late fees over legal limits and failing to report billing disputes to credit reporting organizations, a violation of regulations regarding debt collection and reporting.
American Express consented to refund $85 million to customers and pay $27.5 million in fines.
One issue was with subsidiary American Express Centurian Bank who never gave consumers the $300 reward guaranteed for signing up for an American Express "Blue Sky" cad. CBS explained that the businesses were charging late fees depending on a percentage too, according to CNN. The problem with that was that they were charging more than already established limits.
American Express Centurian Bank also instituted a credit scoring system depending on age, which is contrary to anti-discrimination regulations.
Another problem with debt
At American Express and its subsidiaries, there were lies being told from 2003 until now, according to CBS. The lie was that consumers could increase their credit scores if they paid off debts older than 7 years. These debts do not even show up on a credit rating after that time frame.
According to NBC News, 250,000 people will get part of the $85 million in concessions. This will occur in March 2013.
Many other card corporations in the courtroom
The CFPB isn't wasting much time getting stuck in and performing the job that it was produced to do. Apart from making brand new regulations to better guard customers and proposing reforms, it has also started lodging lawsuits against financial service providers that have fallen afoul of laws, in conjunction with other federal organizations.
Charge card companies have thus far been first in the firing line. Suits involving the CFPB have been brought against Discover and Capital One, according to NBC News, both resulting in settlements in excess of $200 million, much of going to refunding consumers.
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 CFPB. That lawsuit was recently settled.
$85 million returning to consumers
In the lawsuit, American Express is alleged to have broken numerous regulations. The charge card business was accused of discriminating against applicants over 35 years of age, making false claims about charge card rewards, charging late fees over legal limits and failing to report billing disputes to credit reporting organizations, a violation of regulations regarding debt collection and reporting.
American Express consented to refund $85 million to customers and pay $27.5 million in fines.
One issue was with subsidiary American Express Centurian Bank who never gave consumers the $300 reward guaranteed for signing up for an American Express "Blue Sky" cad. CBS explained that the businesses were charging late fees depending on a percentage too, according to CNN. The problem with that was that they were charging more than already established limits.
American Express Centurian Bank also instituted a credit scoring system depending on age, which is contrary to anti-discrimination regulations.
Another problem with debt
At American Express and its subsidiaries, there were lies being told from 2003 until now, according to CBS. The lie was that consumers could increase their credit scores if they paid off debts older than 7 years. These debts do not even show up on a credit rating after that time frame.
According to NBC News, 250,000 people will get part of the $85 million in concessions. This will occur in March 2013.
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