On Wednesday, the Consumer Financial Protection Bureau (CFPB) ordered Apple and Goldman Sachs to compensate customers affected by “customer service disruptions and misrepresentations” with Credit card Apple Card.
The failures “impacted hundreds of thousands of Apple Card users.” according to the CFPB. The agency also noted that Apple and Goldman Sachs ignored “third-party warnings,” pointing to technological problems with the dispute system and that the card was not ready for launch.
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The CFPB noted some issuesincluding defrauding “consumers about interest-free payment plans” and a failure of communication between the companies – the agency alleges that Apple failed to send “tens of thousands” of Apple Card transaction disputes to Goldman Sachs, and those that reached the bank were not investigated properly.
“Apple and Goldman Sachs illegally sidestepped their legal obligations to Apple Card borrowers. Big tech companies and big Wall Street firms shouldn't act like they're exempt from federal law,” said CFPB Director, Rohit Chopra. “The CFPB is barring Goldman Sachs from offering a new consumer credit card unless it can demonstrate it can follow the law.”
How much were Apple and Goldman Sachs fined?
The CFPB is ordering both companies to pay restitution to victims.
Apple has been ordered to pay a civil penalty of $25 million, which will be paid to the CFPB. victim assistance fund.
Related: Tim Cook was reportedly rejected from applying for an Apple card
Meanwhile, Goldman Sachs was ordered to pay “at least” $19.8 million in restitution to victims “for its role in the marketing, offering and servicing of the Apple Card” and an additional $45 million in civil money penalties. The bank must also provide the CFPB with “a credible plan” for complying with the law if it wants to offer a credit card again.
The Apple Card was Goldman Sachs' first credit card lending. The bank, headquartered in New York, is one of the world's largest financial institutions, the CFPB noted, and “primarily focuses on investment banking and investment management, not consumer finance.”
Read on full injunction against Applehere.
Read on full injunction against Goldman Sachshere.