On Wednesday, the Consumer Financial Protection Bureau (CFPB) ordered Apple and Goldman Sachs to pay over $89 million for mishandling consumer disputes related to Apple Card transactions.
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According to the CFPB, Apple failed to forward tens of thousands of consumer disputes to Goldman Sachs—the issuing bank for Apple Card. Even when Goldman Sachs received the disputes, the bank did not comply with federal regulations when investigating these cases, leading to multiple violations during the dispute resolution process. This mishandling caused serious consequences for consumers, ranging from being charged unnecessary interest to incorrect credit reports.
Goldman Sachs was ordered to pay a $45 million civil penalty and $19.8 million in redress to affected customers. Meanwhile, Apple was fined $25 million. In addition, the CFPB banned Goldman Sachs from issuing new credit cards unless they can provide an adequate plan to comply with the law.
CFPB Director Rohit Chopra emphasized, “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.” He also warned that the actions of these large corporations could erode public trust if not addressed promptly.
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Apple Card was first launched in 2019 as an alternative to traditional credit cards, centered on Apple’s mobile payment and digital wallet service, Apple Pay. The company partnered with Goldman Sachs as its issuing bank and promoted the card as simpler and more transparent than other credit cards available on the market.
In December of that year, Apple and Goldman Sachs introduced a new feature allowing users to finance Apple devices using Apple Card through interest-free monthly installments. This was a move expected to make Apple products more accessible to consumers.
However, the CFPB found that Apple and Goldman Sachs misled consumers regarding these interest-free installment plans. Many customers believed they would automatically receive interest-free monthly payments when purchasing Apple devices with Apple Card, but they were still charged interest. Goldman Sachs did not adequately communicate to customers how the refunds would work, leading some to pay unnecessary interest charges. Furthermore, this also led to some consumers having incorrect credit reports, causing them difficulties in maintaining their personal financial records.
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Nick Carcaterra, Vice President of Corporate Communications at Goldman Sachs, stated, “Apple Card is one of the most consumer-friendly credit cards ever offered. We worked diligently to address the technological and operational challenges we encountered after launch and have already handled them with affected customers. We are pleased to have reached a resolution with the CFPB and are proud to have developed such an innovative and award-winning product alongside Apple.”
Apple also stated that it worked closely with Goldman Sachs to address the issues as soon as they became aware of them. A spokesperson for Apple said, “While we strongly disagree with the CFPB’s characterization of Apple’s conduct, we have aligned with them on an agreement. We look forward to continuing to deliver a great experience for our Apple Card customers.”
This case goes beyond just handling consumer disputes—it serves as a wake-up call for major corporations in the tech and finance sectors about the importance of complying with the law. Mishandling consumer disputes can cause significant harm to consumers, from unjust fees to detrimental effects on their credit reports. This not only erodes consumer trust in financial services but also damages the reputation of big brands like Apple and Goldman Sachs.
The resolution of this case demonstrates CFPB’s commitment to protecting consumer rights and reminds large companies that no one is above the law. However, the damage inflicted on consumers from these mistakes may leave a lasting impact, and rebuilding public trust will be a significant challenge for both Apple and Goldman Sachs in the near future.
What do you think about this case? Can Apple and Goldman Sachs regain consumer trust after these violations? Share your thoughts!
