Earlier this month American Express reached a settlement with the Consumer Financial Protection Bureau (CFPB) , the Federal Reserve, and the Federal Deposit Insurance Corp (FDIC) agreeing to pay $112.5 million in refunds and fines. Of the $112.5 million, $85 million will be refunded to about 250,000 customers and the remaining $27.5 million will be paid as civil fines.
The unlawful practices that American Express is accused of include:
- Falsely telling customers that if they would pay off old debts that their remaining balance would be forgiven
- Charging customers late fees based on percentage of total debt owed (a practice made illegal in 2009)
- Failing to report customer disputes to credit agencies
- Leading customers to believe that if they enrolled in their "Blue Sky" program they would received $300 which was never given
- Age discrimination practice against people applying for new account
These alleged unlawful practices have occurred from as early as 2003 and have continued until the spring of 2012.
Customers who are eligible for refunds from American Express are expected to receive notification directly from the company.