Credit-card giant American Express Tuesday announced a $75.7 million settlement to resolve charges that it overbilled consumers and misled customers on services provided.
American Express, a Dow component, will pay $16.2 million in fines and at least $59.5 million in customer remediation, the company said.
The customer remediation will go to more than 335,000 customers, said the US Consumer Financial Protection Bureau in a statement. The action also involved the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.
“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.”
The settlement resolves a variety of allegations over AmEx’s management of various supplementary products to customers, such as “identity protection.”
In some cases, AmEx charged consumers for identity protection services without the written authorization necessary to provide services, the CFPB said.
In other cases, consumers were misled about the benefits of an “account protector” program intended to offer relief after a major life event, such as unemployment or temporary disability.
AmEx said most of the costs associated with the settlements were already accounted for in previous quarters and that most of the remediation to customers has already been paid.
Shares in AmEx closed at $88.69, up 0.4 percent. AFP