The U.S. Department of Justice announced that American Express agreed to pay a USD 108.7 million civil penalty to resolve allegations that it violated the Financial Institutions Reform, Recovery and Enforcement Act of 1989 by deceptively marketing certain credit card and wire transfer products and by entering “dummy” Employer Identification Numbers in small business credit card accounts at its affiliate bank. The United States alleged that, from 2014 to 2017, an affiliated entity conducting sales calls to small businesses misrepresented card rewards, fees, and whether credit checks would occur without consent, and submitted falsified financial information such as overstated income. It also alleged that in 2015 and the first half of 2016 employees used dummy EINs (for example, “123456788”) to open small business credit cards for customers who were required to provide EINs, leaving the incorrect identifiers on accounts for up to two years before remediation, and that application practices around assuming applicants were sole proprietors if the EIN field was left blank exacerbated the issue. Separately, the United States contended that, from 2018 to 2021, American Express deceptively marketed wire transfer products known as Payroll Rewards and Premium Wire by making false assertions about tax benefits tied to above-market wire fees and membership reward points. Contemporaneous with the civil resolution, American Express will enter into a Non-Prosecution Agreement with the U.S. Attorney’s Office for the Eastern District of New York and pay a criminal fine and forfeiture related exclusively to the Payroll Rewards and Premium Wire programs; the civil settlement provides a USD 30.35 million credit against the civil penalty if the forfeiture and fine are paid in full. Except for conduct admitted in connection with the criminal resolution, the resolved civil claims were allegations and there was no determination of liability.
U.S. Department of Justice 2025-01-16
U.S. Department of Justice secures USD 108.7 million FIRREA settlement from American Express over deceptive marketing and dummy EIN account practices
The U.S. Department of Justice announced that American Express will pay a USD 108.7 million civil penalty to resolve allegations of deceptive marketing practices and misuse of Employer Identification Numbers. Allegations include misrepresentations in small business credit card sales and deceptive marketing of wire transfer products. American Express will also enter a Non-Prosecution Agreement and pay a criminal fine and forfeiture related to the wire transfer programs, with a USD 30.35 million credit against the civil penalty if paid in full.