CFPB orders Apple and Goldman Sachs to pay combined $89m over “Apple Card failures”
The Consumer Financial Protection Bureau (CFPB) has ordered Apple and Goldman Sachs to pay nearly $90 million in combined penalties and customer refunds over alleged “customer service breakdowns and misrepresentations that impacted hundreds of thousands of Apple Card users”.
The CFPB has taken action against Apple and Goldman Sachs
CFPB director Rohit Chopra says the US regulator is ordering Apple to pay a $25 million penalty, while Goldman Sachs has been ordered to pay “at least $19.8 million in redress to affected consumers and a $45 million penalty”.
In a statement made on Wednesday, the CFPB claims it found that “Apple failed to send tens of thousands of consumer disputes of Apple Card transactions to Goldman Sachs, and when Apple did send disputes to Goldman Sachs, the bank did not follow numerous federal requirements for investigating the disputes”.
The CFPB says in its statement: “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, and some had incorrect negative information added to their credit reports.”
Additionally, the CFPB claims it found that “Apple and Goldman Sachs misled consumers about interest-free payment plans for Apple devices”, while also claiming that Goldman Sachs “also misled consumers about the application of some refunds, which led to consumers paying additional interest charges”.
Chopra states: “This case demonstrates once again that even the most powerful technology and financial companies can fail to meet their legal obligations to American consumers, causing real financial harm to individuals and families.”
Moreover, Chopra says that the regulator is “prohibiting” Goldman Sachs from offering a new consumer credit card “unless it can provide a credible plan demonstrating that the new product will actually comply with the law”.
Apple first selected Goldman Sachs in 2018 to develop and power its credit card offering. However, speculation around the future of the partnership has grown as Goldman Sachs has been scaling back its retail banking operations over the last year. A September report from The Wall Street Journal indicates that JP Morgan Chase is in talks to replace Goldman Sachs as Apple’s credit card partner.
