US CFPB hits Goldman Sachs, Apple with over $89m penalties over consumer failures
The US Consumer Financial Protection Bureau (CFPB) is ordering Goldman Sachs to pay at least $19.8 million in redress and a $45 million civil money penalty, and Apple to pay a $25 million civil money penalty.
The penalties came in the wake of Goldman Sachs and Apple’s violations of consumer protection laws in their joint credit card business.
Goldman Sachs will also face restrictions on its ability to issue new credit cards, the CFPB added in a statement on Wednesday.
“The CFPB found that Apple failed to send tens of thousands of consumer disputes of Apple Card transactions to Goldman Sachs, and when Apple did send disputes to Goldman Sachs, the bank did not follow numerous federal requirements for investigating the disputes.” “Apple and Goldman launched Apple Card despite third-party warnings to Goldman that the Apple Card disputes system was not ready due to technological issues. These failures meant that consumers faced long waits to get money back for disputed charges, and some had incorrect negative information added to their credit reports.”
Moreover, the CFPB said it also found that Apple and Goldman Sachs misled consumers about interest-free payment plans for Apple devices.
“Many customers thought they would automatically get interest-free monthly payments when buying Apple devices with their Apple Card. Instead, they were charged interest. In some cases, Apple did not even show the interest-free payment option on its website on certain browsers. Goldman Sachs also misled consumers about the application of some refunds, which led to consumers paying additional interest charges.”
CFPB Director Rohit Chopra said: “Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers. Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law,”
“The CFPB is banning Goldman Sachs from offering a new consumer credit card unless it can demonstrate that it can actually follow the law.”
Attribution: CFPB statement
