Apple and Goldman Sachs Get $89 Million Fine
The Consumer Financial Protection Bureau (CFPB) announced today fines totaling $89 million against Apple and Goldman Sachs. The agency had been investigating the two companies for customer service breakdowns and misrepresentations that impacted hundreds of thousands of Apple Card users.
Apple introduced Apple Card in partnership with Goldman Sachs Bank in April of 2019, marking a significant expansion into consumer lending for both companies. The partnership has soured since then and Apple is looking for a new issuer.
The CFPB found that Apple failed to send tens of thousands of consumer disputes of Apple Card transactions to Goldman Sachs. Then, 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. Some cardholders also had incorrect negative information added to their credit reports.
The 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 CFPB is also banning Goldman Sachs from launching a new credit card product, unless it can provide reliable information that it will actually comply with the law.
The agency 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. Goldman Sachs also misled consumers about the application of some refunds, which led to consumers paying additional interest charges.
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