American Express to Refund $85 Million to Customers

Three American Express subsidiaries are refunding  250,000 customers roughly $85 million, plus paying $27.5 million in fines, for illegal card practices after the Consumer Financial Protection Bureau (CFPB) announced enforcement action, according to CBS Local.

According to CFPB, enforcement action was announced after a federal investigation found that American Express violated consumer protection laws at every step of customer experience, including:

Deceptive Practices: American Express Centurion Bank led "Blue Sky" program consumers to believe they would receive $300.

Violated the Credit CARD Act: American Express Centurion Bank and American Express Bank, FSB billed late fees on certain cards based on a percentage that violated the act.

Violates Equal Credit Opportunity Act: American Express Centurion Bank scored credits of applicants by age.

Violated Fair Credit Reporting Act: American Express Centurion Bank and American Express Bank, FSB did not report certain customer disputes to credit bureaus.

Deceptive Debt Practices: All three American Express subsidiaries led consumers to believe that there were credit-related benefits to paying off old debt, when American Express was not reporting the payments of old debt to credit bureaus.

Deceptive Debt Practices: American Express led consumers to believe that a portion of debt would be waived if a settlement offer was accepted, but the company did not waive the debt.

The American Express subsidiaries agreed to correct practices and to refund customers affected by illegal practices, plus interest.

As part of the enforcement, American Express is required to reach out to all customers who were affected by these practices. CFPB warns that any other organization helping American Express customers to recover money is likely a scam.

For more information, visit Jim Donovan's CBS Local Article or the Consumer Financial Protection Bureau Blog.