Goldman Sachs and Apple ordered to pay $89m in US fines over credit card programme
Goldman Sachs and Apple have been ordered to pay $89 million in fines by US regulators for a credit card program that misled customers.
The program, which was launched in 2009, allowed Apple customers to apply for a Goldman Sachs credit card through the iPhone maker's website. However, the application process did not clearly disclose that customers would be charged an annual fee of $99.
The Consumer Financial Protection Bureau (CFPB) found that Goldman Sachs and Apple violated the Truth in Lending Act by failing to provide clear and conspicuous disclosures about the annual fee. The CFPB also found that the companies misled consumers about the benefits of the card, such as the rewards program and the ability to use the card at Apple Stores.
As part of the settlement, Goldman Sachs and Apple will pay a $22 million civil penalty to the CFPB and a $67 million restitution fund for affected customers. The companies will also be required to change the way they market and advertise the credit card program.
"This case sends a strong message to companies that they cannot mislead consumers about the costs and benefits of their financial products," said CFPB Director Rohit Chopra. "The CFPB will continue to hold companies accountable for violating the law and harming consumers."
In a statement, Goldman Sachs said it is "pleased to resolve this matter" and that it is "committed to providing our customers with clear and transparent information about our products and services."
Apple did not immediately respond to a request for comment.
The CFPB's action against Goldman Sachs and Apple is the latest in a series of enforcement actions against companies for misleading consumers about credit card programs. In 2020, the CFPB ordered Capital One to pay $190 million in fines for deceptive marketing practices related to its credit card program.
The CFPB's enforcement actions are a reminder that companies must be transparent and honest with consumers about the costs and benefits of their financial products.
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