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CFPB Fines Apple and Goldman Sachs Combined $89.8 Million
The Consumer Financial Protection Bureau (CFPB) is taking action against both Apple and Goldman Sachs regarding failures related to the Apple Card.
About the order:
The CFPB has ordered Apple and Goldman Sachs to pay a combined $89.8 million due to customer service issues and other alleged missteps with the Apple Card. These fines include at least $19.8 million in redress and $45 million in civil money penalties for Goldman Sachs as well as at least $25 million in civil money penalty for Apple. Additionally, the CFPB is banning Goldman Sachs from launching a new credit card until it can produce a “credible plan” to ensure that any such product would comply with the law.
According to the CFPB’s report, Apple failed to forward “tens of thousands” of consumer transaction disputes to Goldman Sachs. Moreover, in instances where the company did send along the disputes, the agency says Goldman did not follow the proper requirements for investigating these issues. As a result, some Apple Card customers experienced delays in getting reimbursed for disputed charges, with some even seeing incorrect negative information added to their credit reports due to these issues. The CFPB also alleges that the two companies were warned about technological issues affecting the dispute system before the launch of the Apple Card, but were ignored.
Elsewhere in their report, the CFPB alleged that Apple was misleading customers about their interest-free payment plans on purchases of Apple devices. While some buyers believed that they’d automatically be enrolled in this program after buying a qualifying Apple product with their Apple Card, in reality, customers need to select this option before checking out.
What they’re saying:
In a statement regarding the order, CFPB Director Rohit Chopra stated, “Apple and Goldman Sachs illegally sidestepped their legal obligations for Apple Card borrowers. Big Tech companies and big Wall Street firms should not behave as if they are exempt from federal law.” Chopra continued, “The CFPB is banning Goldman Sachs from offering a new consumer credit card unless it can demonstrate that it can actually follow the law.”
My thoughts:
Despite being a long-time Apple Card user, I’ve thankfully never had to dispute a transaction and, thus, haven’t experienced the alleged issues at the core of this CFPB order. However, in regards to the Apple Card no-interest financing feature, I can definitely understand how customers could be confused. In fact, looking back at the article I wrote about financing my iPhone with the program, I realized that I even ran into issues trying to select the correct option! I’ve since financed other Apple purchases using this benefit and haven’t had issues, but clearly there was something amiss earlier on.
One other thing I want to point is that, while the CFPB is barring Goldman Sachs from rolling out another credit card for the time being, they probably don’t have to worry about that. After all, the bank has already sold off one program and is looking to offload the Apple Card partnership as well.
Given that development and now this CFPB order, I do wonder what will become of the Apple Card in the months ahead. I guess we’ll just have to wait and see.
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