Today, the Consumer Financial Protection Bureau (CFPB) took action against Apple and Goldman Sachs, penalizing them for customer service failures and misrepresentations that affected hundreds of thousands of Apple Card users. The CFPB found that Apple failed to forward tens of thousands of Apple Card transaction disputes to Goldman Sachs, and when disputes were sent over, the bank did not follow many federal requirements for investigating them. Apple and Goldman Sachs launched the Apple Card despite third-party warnings that the dispute system was not ready. These failures meant consumers faced long delays in receiving refunds for disputed charges, and some people also ended up with incorrect negative information on their credit reports. The CFPB ordered Goldman Sachs to pay at least $19.8 million in redress and a $45 million civil penalty, while Apple must pay a $25 million civil penalty. The CFPB also barred Goldman Sachs from launching any new credit card unless it can provide a credible plan to ensure its products comply with the law.
In addition, the CFPB found that Apple and Goldman Sachs misled consumers about the interest-free installment plan for Apple devices. Many customers believed that using the Apple Card to buy Apple devices would automatically qualify them for interest-free monthly payments. In reality, they were charged interest. In some cases, Apple did not even display the interest-free installment option on its website in certain browsers. Goldman Sachs also misled consumers in the handling of some refunds, causing them to pay additional interest charges.
It’s still unclear whether there will be a class action lawsuit later that sends money to affected users, so we’ll wait and see.
