American Express to pay USD 230 million to resolve US charges

American Express faced accusations over alleged misleading practices in selling credit card and wire transfer products to small business customers. The company now agreed to pay USD 138.4 million, including nearly USD 108 million in fines, and be part of a non-prosecution agreement to end criminal and civil investigations conducted by the US Department of Justice.

Regulators claimed that between 2014 and 2017, American Express distorted card rewards and fees, while also conducting credit checks without a customer’s consent and submitting false financial information for prospective users. Additionally, the Justice Department alleged that from 2018 to 2021, the company deceived customers in sales pitches regarding the tax benefits of wire transfer solutions, including Payroll Rewards and Premium Wire.

American Express’s agreement with US regulators

The above-mentioned products, Payroll Rewards and Premium Wire, were the subject of the non-prosecution agreement. The deal included internal communications about the two products, such as employee complaints questioning the credibility of Premium Wire, being mentioned that the latter solution was a rather questionable service where customers could write off expenses as a business ones and benefit personally, according to Reuters. Moreover, the US Department of Justice accused American Express sales staff of misleading regulators by entering ‘dummy’ employer identification numbers when opening small business credit cards to replace discontinued co-branded American Express cards.

Furthermore, the company now stated that it reached an agreement with US regulators, expected to be completed in the upcoming weeks. However, as part of the settlement deal with the Department of Justice’s Civil Division, American Express did not admit liability for wrongdoing, denying the allegations about the employer identification numbers and deceptive credit card sales practices. Commenting on the news, representatives from the Civil Division underlined that the settlement with American Express underscored the department’s dedication to holding accountable companies that violate the trust placed in them to follow regulations governing US financial institutions and to be truthful about their business practices.