ALBAWABA - The U.S. Consumer Financial Protection Bureau (CFPB) has fined Apple and Goldman Sachs $89 million for their oversight of the Apple Card, alleging deceptive marketing tactics and significant shortcomings in resolving consumer complaints, FT reports.
According to the CFPB's inquiry, Apple failed to notify Goldman Sachs, the card's issuing bank, of tens of thousands of consumer complaints about the Apple Card, and that when disputes were filed, Goldman often disregarded federal requirements for inquiry and resolution, leaving many customers with unsolved concerns and, in some instances, false negative entries on their credit reports.
Goldman Sachs has also been temporarily prohibited from issuing new credit cards as part of the penalty. This restriction will remain in place until the bank can establish that it is in compliance with federal rules.
In addition to consumer complaints, the CFPB concluded that Apple and Goldman Sachs deceived customers about interest-free payment plans for Apple products; as Apple advertised the card as having no annual or international transaction fees, however certain purchases did include interest charges, as reported by CNN.
Customers affected by these issues will be receiving $20 million in compensation from Goldman Sachs, which was fined an additional $45 million. Apple received a $25 million penalty fee. Although both businesses contended with how the CFPB described their conduct, they accepted the deal without acknowledging any wrongdoing.
Apple claimed that as soon as it became aware of the problems, it promptly collaborated with Goldman to resolve them and assist impacted customers. In a similar vein, Goldman claimed to have fixed the operational and technical issues that had surfaced after the introduction of the Apple Card.
