The Associated Press reported on October 1, 2012, that American Express has agreed to pay $112.5 million in refunds and fines after a multiagency investigation of the company revealed the company “charged unlawful late fees and deceived customers to pressure them to pay off old debts or buy extra credit card services.” In addition to $27.5 million in civil fines, American Express will refund $85 million to about 250,000 customers.
The settlements were announced by four federal agencies, including the Consumer Financial Protection Bureau (CFPB), the Federal Reserve, the Office of the Comptroller of the Currency and the Utah Department of Financial Institutions. The AP reported that the agencies said American Express violated federal laws prohibiting deceptive practices by using false statements to get customers to settle old debts, including falsely telling customers that remaining balances would be forgiven if they agreed to settlements to partially pay off their debts.
CFPB Director Richard Cordray said in a statement that American Express violated consumer protection laws “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,” according to the AP. The company charged late fees on some credit cards based on a percentage of the debt owed, unlawfully discriminated against consumers applying for new card accounts on the basis of age and failed to report customer disputes over billing to the consumer credit reporting agencies.
This news will certainly be welcome for the many victims of American Express’ unethical practices. If you are currently dealing with calls from creditors and struggling to make monthly payments, you can get relief from substantial credit card debt by filing Chapter 7 or Chapter 13 bankruptcy . You may be able discharge your unsecured debt in Chapter 7 , or you could pay back a fraction of what you owe through a Chapter 13 repayment plan. To see how our Chicago bankruptcy lawyers can help, fill out the form on this page or contact our firm today at (866) 930-7482.
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