The Consumer Financial Protection Bureau is not content to sit tight. The bureau has passed brand new regulations and begun waging lawsuits against financial service providers that run afoul of consumer protection regulations, with credit card companies being the first in the firing line. After winning suits against Discover and Capital One, American Express is the most recent to settle with the CFPB, along with other agencies, and has agreed to refund $85 million to customers.
CFPB not pleased with charge card businesses
The Consumer Financial Protection Bureau isn't really wasting much time getting stuck in and performing the task that it was created to do. Besides making brand new regulations to better shield consumers and proposing reforms, it has also begun lodging lawsuits against financial service providers that have fallen afoul of regulations, in conjunction with other federal agencies.
The first CFPB targets have definitely been credit scar businesses. Over $200 million in settlements, mostly cash going to customers have been made in lawsuits with Discover and Capital One already, according to NBC News.
Another lawsuit was just recently settled with American Express too, according to CBS. However, the suit did not just consist of the Consumer Financial Protection Bureau. There were also complains from the Federal Reserve, regulators in Utah State, the Federal Deposit Insurance Company, and the Office of the Comptroller of Currency.
Consumers get quick cash
American Express is in trouble for breaking multiple regulations, such as failing to report billing disputes and regulations about debt collection and reporting. It also charged late charges over legal limits and made false claims about rewards. Also, applicants over the age of 35 were discriminated against.
American Express consented to refund $85 million to consumers and pay $27.5 million in fines.
One issue was with subsidiary American Express Centurian Bank who never gave customers the $300 reward promised for signing up for an American Express "Blue Sky" cad. CBS explained that the businesses were charging late charges depending on a percentage too, according to CNN. The problem with that was that they were charging more than already established limits.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was based on age.
Also issue of debt practices
American Express, American Express Bank and American Express Centurian Bank also told some customers that they could improve credit ratings by paying down debts that were at least 7 years old, which do not affect credit ratings. These violations, according to CBS, are said to have been going on from 2003 to this year.
According to NBC News, 250,000 people will get part of the $85 million in refunds. This will happen in March 2013.
CFPB not pleased with charge card businesses
The Consumer Financial Protection Bureau isn't really wasting much time getting stuck in and performing the task that it was created to do. Besides making brand new regulations to better shield consumers and proposing reforms, it has also begun lodging lawsuits against financial service providers that have fallen afoul of regulations, in conjunction with other federal agencies.
The first CFPB targets have definitely been credit scar businesses. Over $200 million in settlements, mostly cash going to customers have been made in lawsuits with Discover and Capital One already, according to NBC News.
Another lawsuit was just recently settled with American Express too, according to CBS. However, the suit did not just consist of the Consumer Financial Protection Bureau. There were also complains from the Federal Reserve, regulators in Utah State, the Federal Deposit Insurance Company, and the Office of the Comptroller of Currency.
Consumers get quick cash
American Express is in trouble for breaking multiple regulations, such as failing to report billing disputes and regulations about debt collection and reporting. It also charged late charges over legal limits and made false claims about rewards. Also, applicants over the age of 35 were discriminated against.
American Express consented to refund $85 million to consumers and pay $27.5 million in fines.
One issue was with subsidiary American Express Centurian Bank who never gave customers the $300 reward promised for signing up for an American Express "Blue Sky" cad. CBS explained that the businesses were charging late charges depending on a percentage too, according to CNN. The problem with that was that they were charging more than already established limits.
Though it is technically discrimination, one of the subsidiaries was using a credit scoring system that was based on age.
Also issue of debt practices
American Express, American Express Bank and American Express Centurian Bank also told some customers that they could improve credit ratings by paying down debts that were at least 7 years old, which do not affect credit ratings. These violations, according to CBS, are said to have been going on from 2003 to this year.
According to NBC News, 250,000 people will get part of the $85 million in refunds. This will happen in March 2013.
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