(CFPB Orders) American Express to pay $85 million in customer refunds

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(CFPB Orders) American Express to pay $85 million in customer refunds

by Joan McCarter

Score another victory for the Consumer Financial Protection Bureau, and by extension for Elizabeth Warren.

WASHINGTON (CNNMoney) -- American Express will refund $85 million for what government officials called deceptive practices involving about 250,000 customers.

The Consumer Financial Protection Bureau said Monday that American Express (AXP, Fortune 500) subsidiaries illegally charged late fees, deceived customers by promising non-existent money rewards, and discriminated against new applicants over the age of 35.

"Laws were violated at all stages of the game," said CFPB director Richard Cordray in a statement.

Previous investigations by the CFPB have led $140 million in refunds by Capital One to about two million customers, and $200 million to 3.5 million customers from Discover, all over illegal practices and deceptive marketing.

The investigation into American Express began with Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions during a regular exam of American Express Centurion Bank. Then the CFPB joined the investigation, and found it went beyond Centurion Bank to other America Express subsidiaries, including American Express Travel Related Services Co. and American Express Bank. In addition to the $85 million in refunds to customers, the company will pay a $27.5 million penalty, split among the CFPB, the Federal Deposit Insurance Corp., the Federal Reserve and the Office of the Comptroller of the Currency.

Warren, who was the primary driver behind creating the CFPB, took time out of her campaign schedule to issue this statement on the case (via e-mail).

“The consumer agency is hard at work holding credit card companies accountable for deceptive and illegal practices, and today’s enforcement action shows it is getting results for working families across Massachusetts,” said Warren. “I’m proud that the CFPB is standing up to protect people from financial tricks and traps and help create a level playing field.”

This is more proof of what good government can do for its citizens. It's the essense of what this election has boiled down to, and exactly what Mitt Romney, Paul Ryan, and Scott Brown want to prevent in dismantling the Dodd-Frank financial reforms. Having the deck stacked against consumers in favor of Wall Street is exactly what they want.

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http://www.dailykos.com/story/2012/10/01/1138525/-CFBP-order-American-Express-to-pay-85-million-in-customer-nbsp-refunds

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1. Kick! n/t