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American Express has agreed to pay $112.5 million in refunds and fines to settle accusations of unlawful late fees and other deceptive practices.
The self-proclaimed "world's largest issuer of credit cards" had been sued by several federal and state agencies who claimed that the company violated consumer protection laws "at all stages of the game — from the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt," reports The Associated Press.
As part of the settlement, American Express agreed to refund $85 million to about 250,000 customers and pay $27.5 million in fines.
The allegations were a bit surprising as American Express was generally viewed as a stalwart among credit card companies. The company is perhaps best known for having excellent rewards programs and having high limits.
Still, the company was accused of perpetuating almost every possible deceptive practice that a credit card company could be accused of. For example, the company allegedly discriminated against customers based on age, made false promises of cash and bonus points, and failed to report customer disputes over billing to the consumer-credit reporting agencies, reports the AP.
Perhaps the biggest sticking point was American Express' alleged practice to use false statements to get customers to settle old debts. Customers were reportedly told that if they agreed to settlements to partially pay off their debts, the remaining balance would be forgiven. This was apparently not true.
Customers affected by the lawsuit will reportedly be notified by American Express.
Given the nature of credit cards and the ease with which many unsophisticated consumers can access them, the government has set up many regulations governing what credit card companies can and cannot do.
If you believe you have been defrauded by a credit company, you may want to contact a consumer protection attorney to learn your rights. Additionally, if you have any questions regarding acts by your credit card company, you can post a question on FindLaw Answers and normally receive an answer within 24 hours.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.