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Real Estate News Releases
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(EstateNewsWire.com, October 22, 2012 ) San Francisco, CA- On Monday, American Express stated it would reimburse $85 million to just under 250,000 customers who accused the company of violating federal law through its marketing, billing, and collection practices.
The announcement marks the latest in a series of enforced actions against federal national companies by the state and federal regulators. Regulators have exposed some critical and fundamental flaws in the banks monitor vendors perform central business functions.
The investigation of American Express was carried out by Consumer Financial Protection Bureau, Federal Reserve, the Office of the Comptroller of the Currency, and the Utah Department of Financial Institutions. The violations discovered were in violation of the consumer protection laws, spanning from 2003 to this year. “From the moment a consumer shopped for a card to the moment the consumer got a phone call about long overdue debt,” Richard Cordray, director of consumer protection bureau stated.
Lenders sometimes offered customers misleading promotions in order to lure customers into its Blue Sky travel reward credit card program. Customers thought a $300 regard would be available to them, but the reward never materialized, said regulators.
American Express also discriminated based on age. The company is said to have duped consumers into paying stale credit card debts with promise of improving their credit score. Regulators said the company was not reporting payments to credit bureaus at all.
The action was made against the main subsidiaries, Centurion Bank and American Express Bank, FSB. Each company is based in Utah and issue credit cards. American Express Travel Related Services Company was also singled out.
The move against the bank is only a small piece of a broader push by federal and state regulators to protect consumers from illegal debt collection practices for credit cards. This has become an important aspect as millions of Americans struggle to pay their bills in the stagnant economy, still struggling from the recent recession.
In 2012, newly minted Consumers Financial Protection Bureau leveled enforcement against Capital One, as well as Discover Financial, over each company’s sales tactics. Discover agreed to a $200 million settlement to 3.5 million cardholders, as well as a $14 million in penalties to banking regulators. Over five million customers will be refunded between those companies.
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Source: EmailWire.Com 
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