American Express will pay a $108.7 million civil penalty related to allegations of deceptive marketing of credit card and wire transfer services for small businesses, the U.S. Department of Justice announced on Thursday.
The allegations include employees of an American Express telemarketing component making false statements to prospective customers about rewards, fees and credit checks as well as submitting falsified information, such as overstated income, for those prospective customers from 2014 through March 2017, according to the settlement agreement. Additionally, DOJ alleges that American Express employees in 2015 and 2016 entered dummy employee identification numbers for some small businesses applying for cards replacing a co-branded card product that was being discontinued.
The settlement also alleges American Express employees from 2018 through 2021 “deceptively marketed wire transfer products known as Payroll Rewards and Premium Wire to small business customers, making false assertations regarding these products’ tax benefits.” Related to that, American Express is entering into a non-prosecution agreement with the U.S. Attorney’s Office for the Eastern District of New York and will pay a criminal fine and forfeiture, for which it will receive a $30.35 million credit toward the civil penalty, according to the DOJ.
In a statement filed with the U.S. Securities and Exchange Commission on Thursday, Amex said it is paying about $230 million in total to resolve the matters.
“We cooperated extensively with these agencies and our regulators and took decisive voluntary action to address these issues, including discontinuing certain products several years ago, conducting a comprehensive internal review, taking appropriate disciplinary measures, making organizational changes and enhancing policies, compliance and training programs,” according to Amex’s statement.
