If you are an American Express card holder you may get a holiday gift from the Consumer Financial Protection Bureau (CFPB). Thanks to the bureau, 335,000 customers who bought credit card “add-ons” are due for refunds. The CFPB ordered Amex to refund $59.5 million and pay a $9.6 million fine.
CFPB investigators found that from 2000 to 2012 American Express representatives sold credit card protections that appeared to offer more than they actually provided.
HERE’S WHAT AMERICAN EXPRESS SOLD
“Account Protector” allowed consumers to request that 2.5 percent of their outstanding balance, up to $500, be canceled if they lost their jobs or were temporarily disabled.
The problem was that most people thought the account would be cancelled if something bad happened and in many cases the $500 was less than the minimum balance. And the protection was for a far shorter period than most people counted on.
Amex also sold “Lost Wallet” protection, theoretically to help card members in Puerto Rico with cancelling and replacing lost or stolen credit cards, including non-American Express cards, and providing other services, such as recovering lost or stolen documents.
But because many of the sales pitch scripts were only in English, the CFPB says “American Express did not adequately alert consumers during the calls about the steps necessary to receive and access the full product benefits.”
The company’s identity theft protection programs sounded great, but Amex often didn’t get proper authorization from customers to protect their identity and didn’t do the work.
Yet consumers were charged from the moment they signed on and weren’t told that they had to take a second step to give written authorization. Consequently, 85 percent of those who signed up received less than the advertised benefits and many were billed for several years without receiving benefits.
The CFPB says that because of the extra services and fees, customers sometimes exceeded their credit card account limits and ended up paying interest charges on the fees for services they never received.
HOW TO GET YOUR REFUND
If you are still an American Express customer you’ll receive a credit to your account. If you’re no longer an American Express credit card holder, you’ll receive a check in the mail. You won’t have to do anything to get the credit or the check.