Apple and Goldman Sachs Were Fined Nearly $90 Million By the Consumer Financial Protection Bureau — Here's Why The companies were ordered to pay compensation for Apple Card failures.
By Erin Davis
Key Takeaways
- The Consumer Financial Protection Bureau ordered Apple and Goldman Sachs to pay more than $89 million to compensate customers for various Apple Card issues.
- The agency also noted that Apple and Goldman Sachs ignored "third-party warnings" that the disputes system had tech issues and wasn't ready for launch.
On Wednesday, the Consumer Financial Protection Bureau (CFPB) ordered Apple and Goldman Sachs to compensate customers affected by "customer service breakdowns and misrepresentations" with the Apple Card credit card.
The failures "impacted hundreds of thousands of Apple Card users," according to the CFPB. The agency also noted that Apple and Goldman Sachs ignored "third-party warnings," noting tech issues with the disputes system and that the card wasn't ready for launch.
The CFPB noted several issues, including misleading "consumers about interest-free payment plans" and a failure of communication between the companies—the agency claims Apple didn't send "tens of thousands" of Apple Card transaction disputes to Goldman Sachs and those that did make it to the bank weren't properly investigated.
"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," said CFPB Director Rohit Chopra. "The CFPB is banning Goldman Sachs from offering a new consumer credit card unless it can demonstrate that it can actually follow the law."
How Much Was Apple, Goldman Sachs Fined?
The CFPB is ordering both companies to pay victims redress.
Apple is being ordered to pay a civil money penalty of $25 million, which will be paid into the CFPB's victims relief fund.
Related: Tim Cook Was Reportedly Rejected From Applying For an Apple Card
Goldman Sachs, meanwhile, was ordered to pay "at least" $19.8 million in compensation to victims "for its role in marketing, offering, and servicing the Apple Card" and an additional $45 million civil money penalty. The bank must also provide the CFPB with "a credible plan" for complying with the law if it ever wants to offer a credit card again.
The Apple Card was Goldman Sachs's first time in credit card lending. The bank, headquartered in New York, is one of the largest financial institutions in the world, the CFPB noted, and "primarily focuses on investment banking and investment management, not consumer finance."
Read the full order against Apple, here.
Read the full order against Goldman Sachs, here.
