Goldman Sachs and Apple have agreed to settle a lengthy investigation into their credit-card partnership by paying over $89 million.
Goldman Sachs and Apple have agreed to settle a protracted inquiry into their collaborative credit card initiative by paying in excess of $89 million.
Goldman Sachs Group Inc. and Apple Inc. have agreed to settle a prolonged inquiry into their credit-card partnership by paying over $89 million following allegations from the primary consumer protection agency in the United States that they deceived customers and mismanaged conflict resolution processes.
The statement from the Consumer Financial Protection Bureau highlighted how breakdowns in customer service and misrepresentations impacted a large number of Apple Card users. It also pointed out that consumers were misled by the companies regarding interest-free payment options for Apple products.
Goldman was directed by the agency to compensate a minimum of $19.8 million as restitution and a $45 million fine, whereas Apple was fined $25 million. Additionally, the CFPB barred Goldman from introducing a new credit card unless it submits a “credible plan” ensuring the product’s compliance with the law.
Rohit Chopra, the director of the CFPB, pointed out that Apple and Goldman Sachs had circumvented their legal responsibilities towards Apple Card users. He emphasized that major players in the tech and finance industries must adhere to federal regulations instead of acting as if they are above the law.
Goldman Sachs has acknowledged that they faced “specific technological and operational difficulties post-launch, which have since been successfully resolved with affected customers,” according to a bank representative. The spokesperson expressed satisfaction in reaching an agreement with the CFPB.
The company’s spokesperson stated that Apple collaborated closely with Goldman to resolve the issues and assist affected customers.
The Apple spokesperson mentioned in an email statement that although they hold a different opinion regarding the CFPB’s portrayal of Apple’s behavior, they have reached an agreement with the organization.
Card Issues
Goldman is seeking to disentangle itself from the troubled Apple partnership initiated in 2019. Accusations of partiality have been directed at the bank regarding the algorithms used to approve cardholders. In 2022, the bank revealed that the CFPB was scrutinizing its credit card operations, particularly its billing error resolutions and refund procedures. Furthermore, Goldman announced in the previous year that inquiries into these practices had broadened to involve multiple governmental bodies beyond the CFPB.
The Consumer Financial Protection Bureau (CFPB) reported that Apple neglected to forward tens of thousands of customer complaints regarding Apple Card transactions to Goldman Sachs. Furthermore, when these disputes were eventually sent to the bank by the tech company, Goldman failed to comply with the federal guidelines for investigating such disputes, as stated by the CFPB.
The CFPB discovered that customers were deceived by the companies regarding interest-free payment options for Apple products. Expecting automatic interest-free monthly payment schemes, many consumers were instead surprised to see interest charges applied to their purchases.
The Consumer Financial Protection Bureau (CFPB) reported that Apple neglected to forward tens of thousands of customer disputes regarding Apple Card transactions to Goldman Sachs. Furthermore, when Apple eventually transmitted the disputes to the bank, Goldman Sachs allegedly failed to comply with the federal regulations concerning the investigation of such disputes, as per the CFPB.
The Consumer Financial Protection Bureau (CFPB) also discovered that the firms deceived customers regarding interest-free payment options for Apple products. Numerous clients anticipated receiving interest-free installment plans for their Apple device purchases, only to realize later that interest charges were applied.
Chopra criticized the rollout of the Apple card, stating that the execution was chaotic. He mentioned on a call with journalists on Wednesday that crucial systems linked to the card were not prepared before its launch. Despite alerts from third-party sources to Goldman Sachs about technical problems impacting its dispute resolution system, the card was still introduced, as reported by the CFPB.
The Consumer Financial Protection Bureau (CFPB) stated that it would closely monitor Goldman Sachs should the company decide to re-enter the credit card market to prevent any recurrence of previous problems.
