By Lindsay Wise, McClatchy Newspapers –
WASHINGTON — American Express has agreed to refund $85 million to 250,000 customers after an investigation uncovered numerous violations of consumer protection laws, ranging from illegal late fees to age discrimination against credit card applicants, federal regulators said Monday.
The company also failed to report customer disputes to credit bureaus, misled consumers that paying off old debt would help their credit scores and promised people who signed up for “Blue Sky” credit cards that they’d receive $300 but never paid up, regulators said.
American Express must pay an additional $27.5 million in civil penalties, halt the practices and submit to independent audits as part of a settlement that the Consumer Financial Protection Bureau announced Monday in Washington.
The bureau conducted the investigation into the practices of three American Express subsidiaries. It worked alongside the Federal Deposit Insurance Corp., the U.S. Office of the Comptroller of the Currency and the Utah Department of Financial Institutions.
Violations occurred “at all stages of the game — from the moment a consumer shopped for a card to the moment the consumer got a phone call about long-overdue debt,” the bureau’s director, Richard Cordray, said in a statement..
American Express spokesman Michael O’Neill said the company had worked closely with regulators and cooperated fully throughout their reviews.
“We took responsibility for correcting the issues and we are compensating customers where appropriate,” O’Neill said. In agreeing to the settlement, the company doesn’t admit any wrongdoing.
