Goldman Sachs and Apple have agreed to pay a total of USD 89 million to settle violations of consumer protection laws related to their joint credit card venture, the US Consumer Financial Protection Bureau (CFPB) announced.
The charges stem from the companies' handling of the Apple credit card, which was launched in 2019 and allowed customers to finance Apple purchases. The CFPB found that Goldman Sachs mishandled transaction disputes, leading to wrongful charges, damaged credit reports, and delayed refunds for consumers.
The settlement, which includes USD 19.8 million in compensation for affected consumers and USD 70 million in fines, will see Goldman pay USD 45 million while Apple will contribute USD 25 million. The agency highlighted that many iPhone purchasers were misled about interest-free payment options. Consumers were often unknowingly steered toward purchases with interest, especially if they used browsers other than Apple's Safari or enabled privacy settings. These issues, according to the CFPB, caused significant financial harm to families making major purchases.
Goldman Sachs, already moving to exit its partnership with Apple after facing significant financial losses in its consumer banking foray, now faces restrictions on its ability to issue new credit cards. If it seeks to re-enter the credit card business, it will be required to submit a compliance plan 90 days in advance. Both companies have responded to the settlement, with Goldman stating it had worked to resolve operational challenges and address customer issues, while Apple said it "strongly" disagreed with the CFPB’s description but had acted swiftly to help affected users.
(Inputs from Reuters)
