American Express Caught Deceiving Customers
The FDIC and the Consumer Financial Protection Bureau (CFPB) have announced a settlement with American Express Centurion Bank of Salt Lake City concerning deceptive debt collection and credit card marketing practices. American Express will pay restitution $85 million to over 250,000 consumers and pay penalties of $27 million.
The authorities found American Express engaged in the following outrageous practices:
- 1. Misrepresented that if consumers entered into an agreement to settle old debt (that was no longer being reported to consumer reporting agencies), such settlement would be reported to consumer reporting agencies and thereby improve the consumers’ credit scores. In fact, no such reporting occurred.
- 2. Told consumers who entered into settlement agreements to partially pay such debts that their remaining balances of their debts would be forgiven, when in fact the balances remained a debt owed to American Express.
- 3. Misrepresented the points and awards consumers would receive upon enrollment in one of American Express’ credit card products.
As Consumer Reports once put it, they (the banks) are really out to get you!