'Apple Card failures' get Apple and partner Goldman Sachs fined over $89 million
It seems that Apple and Goldman Sachs have been fined over $89 million in fines due to "Apple Card failures". The ruling was announced today by the Consumer Financial Protection Bureau, after investigating the Apple Card for several years.
Initially, it was expected that Goldman Sachs would be the one to get fined, but it now turns out Apple also has to pay some of the fines. Goldman Sachs will reportedly pay at least $19.8 million in redress and a $45 million civil money penalty, while the Cupertino tech giant is said to need to pay a $25 million civil money penalty.
Also, the CFPB is banning Goldman Sachs from launching a new credit card unless it can provide a credible plan that the product will comply with the law. It seems Goldman Sachs is looking to leave the consumer credit card business anyway.
Several alleged issues with the Apple Card were investigated. First, Apple reportedly failed to send "tens of thousands of consumer disputes" to Goldman Sachs. When those were sent, the bank allegedly didn't follow federal requirements for their investigation.
These issues meant that the customers had to wait for a long time to get money back for disputed charges. Also, some had incorrect negative info added to their credit reports.
Secondly, the investigation found that Apple and Goldman Sachs were misleading consumers about interest-free payment plans for Apple devices. Some of the buyers believed they would be getting no interest fees automatically, and some of the interest-free options weren't shown on certain browsers as well.
Goldman is also accused of misleading cardholders about refunds which led to some of the customers paying additional interest.
You can read the full ruling here.
An Apple spokesperson told 9to5Mac the following statement on the issue, indicating Apple strongly disagrees with the CFPB's "characterization of Apple's conduct".
Initially, it was expected that Goldman Sachs would be the one to get fined, but it now turns out Apple also has to pay some of the fines. Goldman Sachs will reportedly pay at least $19.8 million in redress and a $45 million civil money penalty, while the Cupertino tech giant is said to need to pay a $25 million civil money penalty.
Several alleged issues with the Apple Card were investigated. First, Apple reportedly failed to send "tens of thousands of consumer disputes" to Goldman Sachs. When those were sent, the bank allegedly didn't follow federal requirements for their investigation.
The regulator body also says that the two launched the Apple Card despite "third-party warnings" to Goldman that the dispute system of the Apple Card was not ready due to technological issues.
These issues meant that the customers had to wait for a long time to get money back for disputed charges. Also, some had incorrect negative info added to their credit reports.
Secondly, the investigation found that Apple and Goldman Sachs were misleading consumers about interest-free payment plans for Apple devices. Some of the buyers believed they would be getting no interest fees automatically, and some of the interest-free options weren't shown on certain browsers as well.
Goldman is also accused of misleading cardholders about refunds which led to some of the customers paying additional interest.
Apple's statement
An Apple spokesperson told 9to5Mac the following statement on the issue, indicating Apple strongly disagrees with the CFPB's "characterization of Apple's conduct".
Apple is committed to providing consumers with fair and transparent financial products. Apple Card is one of the most consumer-friendly credit cards available, and was specifically designed to support users’ financial health. Upon learning about these inadvertent issues years ago, Apple worked closely with Goldman Sachs to quickly address them and help impacted customers. 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.
— Apple Spokesperson to 9to5Mac, October 23, 2024
In my opinion, I like it when tech is about tech and not financial disputes between corporate giants. So, I hope this gets settled soon and it won't have to drag out, so we can all focus on what matters: the tech.
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Things that are NOT allowed: