American Express has agreed to a $230 million settlement to address accusations of deceptive sales tactics involving credit cards and wire transfer products sold to small business customers.
Breakdown of the Settlement
- Criminal and Civil Probes:
- $138.4 million settlement with the US Department of Justice.
- $108 million in additional fines as part of a Federal Reserve agreement (expected to finalize soon).
Key Allegations
- Misleading Sales Tactics (2014–2017):
- False financial data submitted for potential customers.
- Misrepresentation of card rewards and fees.
- Conducting unauthorized credit checks.
- Deceptive Wire Product Sales (2018–2021):
- Misrepresentation in selling Payroll Rewards and Premium Wire, the latter described internally by employees as “very questionable.”
- Improper Business Practices:
- Using false Employer Identification Numbers (EINs) to open small business credit card accounts, particularly replacing discontinued co-branded cards.
Additional Context
In November 2024, American Express partnered with MX Technologies to create an API-powered data access agreement, highlighting efforts to modernize data-sharing practices amid mounting regulatory scrutiny.