The Consumer Financial Protection Bureau announced Monday that it had ordered three subsidiaries of American Express to refund about $85 million to roughly a quarter-million consumers for violating consumer protection laws. In addition, several federal agencies fined the credit card giant $27.5 million.
The CFPB said illegal activity at the American Express subsidiaries was uncovered by the Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions during a regular examination of American Express Centurion Bank.
When the CFPB took over the investigation, it found that similar violations were also happening at American Express Travel Related Services Co. and American Express Bank. The banks were accused of not reporting consumers' disputed charges to credit bureaus and incorrectly assessing late fees, among other things. The three subsidiaries also deceived consumers about alleged benefits to their credit reports if they paid off old debts, the CFPB said.
American Express spokesman Michael O'Neill said the company had cooperated fully with regulators and took responsibility for correcting problems. The three subsidiaries are supposed to identify the harmed customers and make sure they get their money back.