Credit card giant American Express will pay $75.7 million in a settlement to consumers after it was found to have misled and overcharged their customers for unnecessary or undeliverable services.
AmEx, which is a Dow Jones list member, will pay $16.2 million in fines and $59.5 million in compensation to over 335,000 customers. The US Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation and the Comptroller of the Currency were all involved in the settlement.
“We first warned companies last year about using deceptive marketing to sell credit card add-on products, and everyone should be on notice of this issue,” said CFPB Director Richard Cordray.
“Consumers deserve to be treated fairly and should not pay for services they do not receive.”
AmEx was found guilty of misrepresenting an assortment of add-on products which they sold to their customers, such as “identity protection” coverage and a so-called “account protector” program.
It was discovered that in several cases AmEx billed customers for identity protection services even though they did not have the written authorization to deliver those services said a representative of the CFPB.
AmEx said that most of the costs connected to the settlements were already included in previous quarters and that almost all of the remediation payoffs have already taken place.