Government regulators on Wednesday ordered Apple and Goldman Sachs to pay a combined $89 million in penalties and restitution for misleading consumers about the Apple Card and mishandling their complaints. The Consumer Financial Protection Bureau said its investigation found the partners violated the Consumer Financial Protection Act and the Truth in Lending Act, NPR reports. "These failures are not mere technicalities," Director Rohit Chopra said. "They resulted in real harm to real people." The harm included wrongful charges, mishandled disputes, and damaged credit reports, he said, which affected hundreds of thousands of cardholders.
The problems with the card, promoted at its launch as a new kind of credit card "designed to help customers lead a healthier financial life," included:
- Disputes: The companies did not properly handle customer disputes, Chopra told reporters. Apple didn't send "tens of thousands" of disputes on Apple Card transactions to Goldman Sachs, the agency said. Even when Goldman was informed, the bank often did not follow federal rules to investigate and resolve them. So cardholders were being unfairly held responsible for the disputed charges.
- Misleading consumers: The agency said the companies deceived consumers about interest-free payment options for Apple devices. They charged interest despite leading users to believe they would automatically be given interest-free financing when they bought Apple products with the card. Consumers shopping online could only see the interest-free option if they were using Safari, per the Verge.
A spokesperson for Goldman Sachs welcomed resolution of the case while saying, "We worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted customers." Apple disputed "the CFPB's characterization of Apple's conduct" and said it had worked with the investment bank to correct the issues. The penalties imposed are:
- Apple: The giant company must pay a fine of $25 million. Apple reported third-quarter revenue of $85.8 billion this summer.
- Goldman Sachs: The investment bank must pay a $45 million fine and $20 million in redress to customers. It also is prohibited from offering a new credit card unless it demonstrates it has "a credible plan" for compliance with the law. Goldman Sachs reported third-quarter revenue of nearly $13 billion last week, per the Times.
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