American Express & Discover Ordered to Refund Millions

Hot on the heels of Discover refunding $200 million to customers, news broke that American Express will be refunding $85 million to their customers as well.

The Consumer Finance Protection Bureau (CFPB) has begun coming down hard on credit card companies using deceptive marketing tactics on their customers. Earlier this year Capital One was penalized and paid $150 million to its customers and an additional $60 million in associated fees.

Discover bank will be paying 3.5 million customers due to their misleading practices as well. According to the CFPB the company:

  • Misled customers to believe some credit card add-ons were free while they were really being charged for them.
  • Misled customers about purchasing the product as consumers were told they would not be charged until they received written material about the services first, but did not provide the information until after the customer purchased the services.
  • Enrolled consumers without their consent.
  • Failed to disclose eligibility requirements for certain products.

Consumers who were charged for any of the products between December 1st, 2007 and August 2011 may be eligible to receive refunds based on factors like products charged, dates enrolled, whether or not you used the services, and more.

American Express be sending refunds to about 250,000 customers. The Consumer Finance Protection Bureau noted the following violations between 2003 and 2012:

  • Led consumers to believe they would receive a $300 bonus if they signed up for the American Express Centurion Bank program; qualifying customers never received the bonus.
  • Mischarged late fees.
  • Failed to report customer disputes to the consumer reporting agency.
  • Deceived customers into believing paying off old debts would be beneficial when in fact American Express was not reporting the payments and the debts were so old they were likely no longer on the customer’s credit report.

American Express customers should expect refunds by March 2013.

The Takeaway

While these three credit card companies are paying for their mistakes, it is also a learning point for other companies and consumers. Be aware of what your credit cards are charging you for, and don’t agree to new services if you feel you’re being pushed or misled about the benefits of these products. If you think credit monitoring services might be a good option for you, AmOne can help you find one that will fit your needs. Contact AmOne today to learn more about credit monitoring services and to get any other credit questions answered.