Jan. 16 (UPI) — American Express has agreed to pay nearly $109 million in fines related to deceptive marketing and false account allegations, the Justice Department announced Thursday.
A release from the Justice Department said the company settled claims that it deceptively marketed credit card and wire transfer products and entered “dummy” Employer Identification Numbers in the credit card accounts of its affiliate bank.
“When financial companies engage in deceptive sales tactics or falsify information to cover up a failure to follow applicable regulations, they threaten the integrity of our financial system,” said Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division.
“We cooperated extensively with these agencies and our regulators and took decisive voluntary action to address these issues, including discontinuing certain products several years ago,” American Express wrote in a statement about the settlement.
American Express went on to say that the company conducted an internal review, disciplined employees and bolstered training and compliances measures. All told, American Express said it paid more than $230 million “to resolve these matters.”
From 2014 to 2017, American Express allegedly used deceptive practices to market credit cards to small businesses, including by misrepresenting rewards programs, fees and not making it clear whether credit checks would be done without a customer’s consent.
American Express also allegedly submitted falsified financial information for prospective customers, such as overstating a business’s income.
The phony EINs were entered when American Express sold a card to a small business to replace a co-branded card that was being discontinued.
“American Express employees used ‘dummy’ EINs such as ‘123456788’ in opening small business credit cards in 2015 and the first half of 2016,” the Justice Department release said.
The Justice Department said American Express allowed the EINs to remain on the new cards for as long as two years.
American Express also allegedly deceptively marketed the company’s wire transfer products known as Payroll Rewards and Premium Wire between 2018 and 2021, making false claims about their tax benefits.
“American Express allegedly would wire money for an above-market fee that was far in excess of that offered by competitors in the marketplace and award the businesses or the business owners credit card membership reward points,” the Justice Department said.
