The Department of Justice (DOJ) announced Thursday that American Express has agreed to pay $230 million to resolve a federal investigation into deceptive marketing practices and civil fraud charges.
under settlement American Express will pay more than $108 million in civil penalties to resolve allegations that the company violated the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), the Department of Justice announced. Agreed.
in Separate releaseThe Justice Department said American Express entered into a non-prosecution agreement and agreed to pay more than $138 million for engaging in sales practices that provided consumers with false tax advice.
The Justice Department alleged that the New York-based company deceptively sold credit card and wire transfer products by entering “dummy” employer ID numbers into credit card accounts at affiliated banks. . The investigation began in 2021.
“The integrity of the financial system is threatened when financial companies engage in deceptive sales tactics that falsify information to conceal their failure to comply with applicable regulations,” Assistant Attorney General Brian Boynton said in a statement. It will happen,” he said.
Boynton said Thursday's settlement makes it clear that the Justice Department is accountable to those who violate consumer trust in financial services.
The Justice Department alleged that American Express deceptively sold credit cards from 2014 to 2017 by using affiliates to make cold calls to small businesses. According to the Department of Justice, the company misrepresented card benefits and fees, whether credit checks were run without consumers' consent, and submitted false financial information to customers, including inflating the company's income. He says he will.
The department also alleged that the company defrauded federally insured financial institutions and allowed small businesses to obtain credit cards without the required identification. Employer identification numbers are required by law, but the Justice Department alleges that American Express used “dummy” numbers to open cards for small businesses in 2015 and 2016.
The Department of Justice said American Express deceptively sold wire transfer products to small business customers from 2018 to 2021. Employees allegedly told consumers that wire transfer fees were deductible, even though they were not.
in statementAmerican Express confirmed the settlement agreement and said it “cooperated extensively” with the agency it was investigating, cutting product prices, conducting internal reviews and implementing other organizational changes several years ago. pointed out.
“Pursuant to the agreement and after the granting of credits, American Express will pay a total of approximately $230 million to resolve these issues,” the company said in a release. “We expect to reach a resolution with the Federal Reserve Board in the coming weeks.”
