AMEX Fined Again by CFPB account protection 59 Mil.

[ICANHASMUNY?]

http://www.consumerfinance.gov/newsroom/cfpb-orders-american-express-to-pay-59-5-million-for-illegal-credit-card-practices/

 

The Consumer Financial Protection Bureau (CFPB) today ordered American Express to refund an estimated $59.5 million to more than 335,000 consumers for illegal credit card practices. These practices included unfair billing tactics and deceptive marketing with respect to credit card “add-on products” such as payment protection and credit monitoring. American Express will pay an additional $9.6 million in civil penalties to the CFPB.

 

 

 

•The benefits of the payment protection products: Some consumers were led to believe that if they bought the Account Protector product, their minimum monthly payment would be cancelled if they experienced a qualifying life event. In reality, the benefit payment would be limited to 2.5 percent of the consumer’s outstanding balance, up to $500. In many cases, that amount was less than the minimum payment due.

•The length of coverage of the payment protection products: Consumers were led to believe that the benefit periods for Account Protector would last up to 24 months. In fact, only two of the 13 qualifying events with benefit periods had benefit periods of up to 24 months. The other 11 qualifying events had benefit periods of only one, two, or three months.

•The fees associated with payment protection products: American Express or its vendors would claim that there would be no fee if the balance in the account was paid off every month, without disclosing that the account balance had to be paid off before the end of the billing cycle, which was an earlier date than the consumer’s statement due date.

•The terms and conditions of the Lost Wallet product: American Express used telemarketing sales calls conducted in Spanish to enroll the vast majority of Puerto Rico consumers in this product. Yet American Express did not provide uniform Spanish language scripts for these enrollment calls, and all written materials provided to consumers were in English. As a result, American Express did not adequately alert consumers during the calls about the steps necessary to receive and access the full product benefits.

 

Unfair Billing and Other Illegal Practices

 

American Express also engaged in unfair billing practices related to its “identity protection” add-on products. These products supposedly include a service to monitor the card members’ credit information. To obtain credit monitoring services, consumers generally must provide written authorization. American Express, however, charged many consumers for these products without or before having the written authorization necessary to perform the monitoring services. As a result, the company:

•Billed consumers for services they did not receive: Consumers were charged fees as soon as they enrolled in identity protection add-on products, even when American Express or its vendors had not yet obtained the authorization necessary to begin monitoring the consumers’ credit information. American Express did not inform consumers that they needed to complete a second step in the enrollment process to obtain all of the advertised benefits. Approximately 85 percent of consumers who enrolled in the identity protection products paid the full product fee without receiving all of the advertised benefits. In some cases, consumers paid for these services for several years without receiving all of the promised benefits.

•Unfairly charged consumers for interest and fees: The unfair monthly fees that customers were charged sometimes resulted in customers exceeding their credit card account limits. This then led to additional fees for the customers. Some consumers also paid interest charges on the fees for services that were never received.

•Failed to inform consumers about their right to a free credit report: Federal law requires that when telemarketing sales calls are made that include offers of free credit reports, the call must include a disclosure about the consumer’s right to a free credit report from a federally authorized source. In some solicitations, American Express did not make the required disclosure

 

 

 

[PotO]

Makes me wonder if American Express is inept or just caught trying to be shrewd.

[shifter]

That's shady to charge fees if the balance isn't paid before the statement date which is always a couple days before the due date. I always decline that insurance but I would have been misled just like everyone else.

[Caiyenne]

This is a shame. Glad they got caught.

[Guest]

Makes me wonder if American Express is inept or just caught trying to be shrewd.

+1

 

Almighty AMEX? I don't see it.......