As per the information detailed in the official press release, the CFPB’s decision to fine Apple and Goldman Sachs comes as the two companies illegally mismanaged transaction disputes and misled iPhone purchasers about interest-free payment options. The regulator mentioned that Apple and Goldman Sachs’ actions impacted hundreds of thousands of Apple Card users.
Apple and Goldman Sachs introduced the Apple Card in 2019 even if the two encountered third-party warnings that the dispute system was not ready due to technological issues. The collaboration enabled Apple to offer a financing solution to scale sales of its devices, including iPhones and iPads. On the other hand, Goldman Sach’s participation in Apple Card intended to expand its offering in consumer finance.
The CFPB revealed that Apple did not send consumer disputes of Apple Card transactions to Goldman Sachs while when it did, the bank did not follow several federal demands for investigating them. This resulted in consumers having to wait long periods before regaining their funds for disputed charges, while some had incorrect negative information included in their credit card reports. These failures saw the CFPB ordering Goldman Sachs to pay a minimum of USD 19.8 million in redress and a USD 45 million civil money penalty. On the other hand, Apple was fined with a USD 25 million civil money penalty. In addition, the CFPB’s findings led to it banning Goldman Sachs from introducing a new credit card unless it can offer a credible plan that the solution can actually comply with regulatory requirements.
At the same time, the CFPB revealed that Apple and Goldman Sachs deceived consumers regarding interest-free payment plans for Apple devices, with many users believing that they would automatically receive interest-free monthly payments when purchasing products with their Apple Card. However, they were charged interest and, in some cases, Apple did not even show the option on its website on specific browsers. Also, Goldman Sachs misled individuals about how some refunds were applied, leading to consumers having to pay more interest charges.
When commenting on the announcement, representatives from the CFPB mentioned that Apple and Goldman Sachs illegally bypassed their obligations for Apple Card borrowers, with the regulator underlining its ban against the bank to provide a new consumer credit card until it demonstrates that it can follow the law.
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