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American Express will pay $112.5 million in refunds and fines after a multiagency investigation revealed the company “charged unlawful late fees and deceived customers to pressure them to pay off old debts or buy extra credit card services.” The Associated Press reported on October 1, 2012, that American Express will refund $85 million to about 250,000 customers in addition to paying $27.5 million in civil fines. According to the AP, the settlements were announced by four federal agencies, including the Consumer Financial Protection Bureau (CFPB), the Federal Reserve, the Office of the Comptroller of the Currency and the Utah Department of Financial Institutions. The agencies said American Express violated federal laws prohibiting deceptive practices by using false statements to get customers to settle old debts. The AP reported that this included falsely telling customers that remaining balances would be forgiven if they agreed to settlements to partially pay off their debts. Consumers struggling with credit card debt and receiving harassing calls from debt collectors should know that an automatic stay goes into effect when an individual files Chapter 7 or Chapter 13 bankruptcy. The automatic stay prohibits most creditors from continuing with collection activities. Kevin Benjamin Benjamin Legal Services
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chapter 13 bankruptcy, chapter 7, credit card debt, american express, consumer financial protection bureau, federal reserve, office of the comptroller,
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