The U.S. Consumer Financial Protection Bureau (CFPB) has ordered Apple and Goldman Sachs to pay a fine of over $89 million as a result of both companies failings surrounding the Apple Card credit card. The fines are quoted to be due to customer service breakdowns and misrepresentations, which have impacted hundreds of thousands of Apple Card users.
The Apple Card launched in the U.S. back in 2019 as a credit card for a "healthier financial life," which was a result of a partnership between Apple, U.S. bank Goldman Sachs, and Mastercard, and is entirely digital and managed through the Wallet app on Apple devices. Other incentives that launched with the card included cashback when purchasing directly from Apple, or when using Apple Pay.
The fine that has been issued today will be broken down between the two companies as follows:
- Goldman Sachs will pay at least $19.8 million in redress
- Goldman Sachs will pay a $45 million civil money penalty
- Apple will pay a $25 million civil money penalty
The key issues that the CFPB highlights in its news posting about the fine that made its decision include failing to process or share consumer disputes, investigate cardholder disputes, and misleading cardholders about a payment plan for iPhones and other Apple products. The latter allowed cardholders to purchase Apple devices on plan of interest-free payments of a period of six months to two years, however, many cardholders were unknowingly charged interest as they were not automatically enrolled as expected.
Additionally, the CFPB is also "banning Goldman Sachs from launching a new credit card unless it can provide a credible plan that the product will actually comply with the law." However, Goldman Sachs has been looking at ways that it can hand off the partnership to other Credit Card providers such as American Express, partly due to the bank wanting to scale back its consumer operations.
2 Comments - Add comment