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Goldman and Apple Fined $89MIL For CHEATING Over Card Tie Up

Apple and Goldman Sachs Fined $89 Million by CFPB For Apple Card Failures

While Apple continues to look for a new home for the Apple Card, the tech giant and its current issuer have been accused of mismanaging customer accounts.

AP 24 OCT 2024

https://www.cnet.com/a/img/resize/fc...675&width=1200

Apple and Goldman Sachs have been fined more than $89 million collectively for negligence and mismanagement of the co-branded Apple Card*, the Consumer Finance Protection Bureau announced Wednesday.

The CFPB statement disclosed that the tech giant and investment bank misled customers about interest-free payment plans, mishandled credit card disputes, delayed refunds and allowed incorrect, damaging information to hit customers' credit reports.

"Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers," CFPB Director Rohit Chopra said in the statement. "Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law."

The CFPB is ordering Apple to pay a $25 million civil money penalty. Apple's fines will go toward the CFPB's victim relief fund.

"Apple is committed to providing consumers with fair and transparent financial products," an Apple spokesperson told CNET. "Upon learning about these inadvertent issues years ago, Apple worked closely with Goldman Sachs to quickly address them and help impacted customers. While we strongly disagree with the CFPB's characterization of Apple's conduct, we have aligned with them on an agreement."

Goldman Sachs is required to pay at least $19.8 million in redress in addition to a $45 million civil penalty. In addition to paying fines, the investment bank is not allowed to launch any new credit cards until it can provide "a credit plan" that proves it can deliver a product that follows the law, the CFPB statement added.

"Apple Card is one of the most consumer-friendly credit cards that has ever been offered," Nick Carcaterra, a Goldman Sachs spokesperson told CNET. "We worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers. We are pleased to have reached a resolution with the CFPB and are proud to have developed such an innovative and award-winning product alongside Apple."

Why are Apple and Goldman Sachs being fined?

The CFPB lists four areas where Apple and Goldman Sachs failed in its handling of Apple Card members:

Failing to process or share consumer disputes: Apple neglected to send millions of customers' Apple Card disputes to Goldman Sachs, according to the CFPB. Disputes happen when a cardholder has an unrecognized charge on their account, so they reach out to the card issuer to get a charge-back.
Failing to investigate disputes: Goldman Sachs was aware of the dispute issue and even notified Apple, the CFPB said. Neither company investigated these disputes, leaving cardholders on the hook to pay for transactions that were never reviewed.
Misleading cardholders about interest-free payment plans for iPhones and other Apple products: Cardholders expected to automatically receive interest-free monthly payments for buying iPhones with their Apple Card. In reality, the customers were charged interest on their new purchase. In certain instances, the CFPB claims Apple did not show available interest-free financing options on specific browsers.
Misleading cardholders about refunds: Goldman Sachs misled consumers regarding some refunds, the CFPB said, which in turn led to cardholders paying extra interest charges.

What Should Apple Cardholders Do Next?

There's nothing current cardholders need to do right now. If you suspect your credit card has been mishandled in any other ways, you can file a complaint with the CFPB.