American Express To Pay $75.7 Million for Deceptive Marketing
American Express has agreed to pay $75.7 million to its customers and regulators after a series of claims against the company regarding deceptive marketing practices.
The Federal Deposit Insurance Corp. (FDIC), Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) filed these claims against Amex because the company misrepresented the cost and benefits of its add-on products.
$59.5 million of that money will be distributed to over 335,000 consumers who were affected by the deceptive marketing campaigns on the company’s protection services. The remaining $16.2 million will go to regulators for penalties against the company between 2000 and 2012.
The agencies reported that American Express billed consumers for services they never received. The company has neither confirmed nor denied its wrongful practices.
“We first warned companies last year about using deceptive marketing to sell credit card add-on products, and everyone should be on notice of this issue,” said CFPB Director Richard Cordray in a statement. “We are refunding thousands of American Express customers who were harmed by these illegal practices.”
American Express also released a statement, saying, “American Express has cooperated fully with the CFPB, FDIC and OCC. [The company] continues to conduct internal reviews designed to identify issues, correct them and ensure that its products and practices meet a high standard of quality.”