Apple and Goldman Sachs have been fined by the Consumer Financial Protection Bureau (CFPB) a sum of $89 million for illegally mishandling transaction disputes and misleading iPhone buyers about the interest-free payment options, according to The Verge.The issues affected hundreds of thousands of Apple Card users.
The iPhone maker reportedly did not send “tens of thousands” of the transaction disputes to Goldman Sachs. Further, the disputes which were sent, were not probed in a timely manner by Goldman Sachs, in conformance with the federal law.
Civil money penalty will go to victims relief fund
Apple cardholders were reportedly led to believe that the purchase of Apple devices using Apple Card would automatically result in interest-free finance. However, in surprise to the cardholders, the finance transactions were tagged with an interest charge. Further, the consumer protection agency added that only the cardholders using Apple’s Safari web browser were presented with an interest-free financing option.
The CFPB has said that Apple will have to pay a civil money penalty of $25 million which will go to the agency’s victims relief fund. Additionally, the global investment bank will have to pay at least $19.8 million in reparations and $45 million as civil money penalty. Goldman Sachs will also not be allowed to introduce a new credit card without explaining to CFPB its plan to ensure compliance with federal laws.
“Apple Card is one of the most consumer-friendly credit cards that has ever been offered,” said Goldman Sachs’ Vice President of Corporate Communications Nick Carcaterra, in a statement to The Verge. “We worked diligently to address certain technological and operational challenges that we experienced after launch and have already handled them with impacted 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.”
The Wall Street Journal reported late last year that Apple is exploring the option of having JPMorgan take over the operational activities of the Apple Card.
