By John Meyer, consultant in financial affairs – Eurasia Business News, January 16, 2025. Article No 1376.
American Express has agreed to pay approximately $230 million in fines to settle investigations into aggressive and misleading sales practices targeting small business customers, reports the Wall Street Journal.
The settlements include a $108.7 million civil penalty from the Justice Department and a nonprosecution agreement with the Eastern District of New York over a criminal investigation into some of the practices. The company has also reached an agreement in principle with its regulators at the Federal Reserve that it expects will be finalized in the coming weeks.
The investigations focused on sales strategies that American Express has since abandoned, with the company stating that these practices ceased in 2021 or earlier.
The issues were self-disclosed by American Express, and the company has cooperated extensively with regulatory agencies.Key points of the settlement include:
- A civil penalty of $108.7 million imposed by the Justice Department.
- A non-prosecution agreement related to an inquiry by the Eastern District of New York.
- A preliminary agreement with the Federal Reserve, expected to be finalized soon.
The problematic practices involved:
- Deceptive marketing of credit cards and wire services to small businesses.
- Misrepresentation of rewards and fees.
- In some cases, issuing cards against customers’ wishes.
American Express has taken several steps to address these issues :
- Discontinuing certain products years ago.
- Conducting internal reviews.
- Implementing disciplinary actions.
- Making organizational changes.
- Enhancing policies and compliance training programs ;
The company stated that the financial impact of the settlements has largely been accounted for in previous periods and is not expected to affect its financial guidance for 2024.This settlement highlights the ongoing scrutiny of sales practices in the financial industry and the potential consequences of aggressive marketing tactics;
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© Copyright 2025 – Eurasia Business News. Article no. 1376.
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