American Express to shell out $75.7 mn for overbilling

American Express to shell out $75.7 mn for overbillingToday American Express the credit-card giant announced a USD 75.7 million settlement to resolve charges that it overbilled consumers and misled customers on the services provided.

The company said, American Express, a Dow component, will pay USD 16.2 million in fines and at least USD 59.5 million in customer remediation.

The US Consumer Financial Protection Bureau in a statement said that the customer remediation will be to more than 335,000 customers. The action also involves the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

Richard Cordray, CFPB Director said, "We first warned companies last year about using deceptive marketing to sell credit card add-on products, and everyone should be on notice of this issue."

He also mentioned that, "Consumers deserve to be treated fairly and should not pay for services they do not receive."

The CFPB said, in some cases, AmEx charged consumers for identity protection services without the written authorization necessary to provide services. Whereas in others consumers were misled about the benefits of an "account protector" program intended to offer relief after a major life event, such as unemployment or temporary disability. In October, AmEx announced its third-quarter profits rose 9.3 percent to US$1.37 billion. Shares in AmEx closed at USD 88.69, up 0.4 per cent.

American Express shares rose to a record US$88.69 on Tuesday.