If you’re an American Express customer, you may be getting some cash back in the near future – a federal agency has ordered the credit card issuer to refund cardholders $60 million because it falsely advertised a service it did not provide.
The Consumer Financial Protection Bureau (CFPB) is a federal agency created in 2011 to oversee how financial products are marketed to and used by Americans. As part of its role as a watchdog, the CFPB sets rules for how credit card companies are permitted disclose information to consumers.
According to CNN Money, the CFPB has ruled that American Express wasn’t clear with its customers when it marketed an identity theft monitoring product; AmEx charged a fee for the service, but never provided it. In addition, the credit card issuer structured one of its fees in way that resulted in more fees, a practice deemed unfair by the CFPB.
All this resulted in a ruling by the CFBP that stated that the company must refund $60 million to the 335,000 customers impacted. American Express was also fined $9.6 million for its actions, and must pay additional penalties to federal agencies besides the CFPB. AmEx has already begun paying the refunds.
Since the Great Recession, the federal government has been much more strict about credit card companies’ practices regarding fees charged to consumers. The AmEx crackdown is part of a larger effort to be sure that credit products – which consumers must use in order to build their credit scores – are advertised fairly to Americans and, once in hand, live up to the claims they initially made. After paying out well over $70 million in refunds, fines, and fees, it’s likely that American Express (as well as the other major card issuers) will think twice before using deceptive tactics.