American Express Co., including its American Express Travel Related Services unit, announced a $75.7 million settlement with the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corp., and the Office of Comptroller of the Currency over deceptive debt collection and marketing practices.
The settlements, which also involve American Express Centurion Bank and American Express Bank, relate to deceptive debt collection, and marketing of now-discontinued add-on products or services, including identity protection, account protection in the event of job loss or hospitalization, and lost-wallet protection.
American Express agreed to pay $16.2 million in fines and at least $59.5 million to compensate customers who were ripped off.
A spokesperson says if former customers no longer have an American Express account or have changed addresses the company has resources, such as credit bureaus, to find them and mail checks.
Most of the remediation has already taken place, and the costs associated with the settlement have been accounted for in prior quarters, American Express states.
Among the transgressions, according to a Consumer Financial Protection Bureau announcement in 2012 about its enforcement action, is that American Express “deceived” customers who signed up for the American Express Blue Sky credit card program into erroneously believing they would receive $300 in bonus points.
In addition, American Express Travel Related Services, American Express Centurion Bank and American Express Bank “deceived consumers into believing there were certain benefits to paying off old debt,” but payments were never reported to credit bureaus, the CFBP said.
As part of the settlements, American Express stated it ceased marketing these products more than a year ago, and “continues to conduct internal reviews designed to identify issues, correct them and ensure that its products and practices meet a high standard of quality.”
The following is an October 1, 2012, consent order between American Express Travel Related Services and the U.S. Consumer Financial Protection Bureau: