The Consumer Financial Protection Bureau yesterday announced an enforcement action against Apple and Goldman Sachs for mishandling consumer disputes and misleading users of the Apple Card. The financial penalties include a $45 million civil money penalty for Goldman Sachs, a $25 million penalty for Apple, and at least $19.8 million in redress to consumers. The CFPB’s findings highlight significant customer service breakdowns that affected hundreds of thousands of Apple Card users.
Why it matters: The CFPB’s investigation uncovered failures by both Apple and Goldman Sachs to properly process transaction disputes, leading to long delays in refunds, unauthorized interest charges, and incorrect negative information reported to consumer credit agencies.
Key details:
- Apple and Goldman Sachs launched the Apple Card in 2019, despite technological issues that Goldman warned were unresolved, which impacted the dispute processing system.
- Apple failed to forward tens of thousands of consumer disputes to Goldman Sachs for investigation, meaning many cardholders were unfairly held responsible for potentially unauthorized purchases.
- For the disputes it did receive, Goldman Sachs failed to consistently send acknowledgment notices to consumers within 30 days, conduct reasonable investigations, or send resolution letters explaining the determinations of its investigations within 90 days. Because of these failures, the CFPB said Goldman illegally placed damaging information on consumers’ credit reports and held cardholders responsible for potentially fraudulent or unauthorized purchases.
- Misleading practices were also identified in relation to Apple Card Monthly Installments (ACMI), where many consumers believed they would receive interest-free payments for Apple products but were instead charged interest.
Between the lines: The CFPB is also prohibiting Goldman Sachs from introducing a new consumer credit card without presenting a credible compliance plan.
What they said: “These failures are not mere technicalities,” said CFPB Director Rohit Chopra during a call announcing the enforcement action. “They resulted in real harm to real people.”
